Jun. 8, 2022 "Retailers renewed confidence in brick-and-mortar fuelling surge in commercial leases": Today I found this article by Tara Deschamps on BNN Bloomberg:
When the COVID-19 pandemic struck and many abandoned in-person shopping and dining out, brick-and-mortar retail became one of the most undesirable assets in Canada.
But now, as many Canadians no longer fear congregating and vaccine passports have been dropped, real estate firms say retail and restaurant chains are scrambling to pick up space again.
"There's been a fairly ugly period brought on by COVID, where there was a lot of uncertainty surrounding where physical retail fits within the consumer landscape, and even before COVID...because of e-commerce," said Jonathan Gitlin, chief executive of RioCan Real Estate Investment Trust.
"Now, I can comfortably say we're in a position where physical retail has established itself and there's far less ambiguity."
Fried chicken chain Popeyes has plans to open 200 more stores in Canada and the U.S. this year,
burrito joint Chipotle will add 10 shops in B.C.
and Ontario and BeaverTails has more than 20 in the works.
Footwear brand Allbirds and
fast-food spots Xero Degrees
and Prince Town Pizza are all locking in Canadian locations too.
More than 90 per cent of RioCan's real estate portfolio is comprised of retail space.
Grocers,
pharmacy
and liquor tenants make up 20 per cent of its retail rent -
- the biggest share of any sector --
followed by specialty retailers at about 15 per cent,
personal services at 14 per cent
and value retailers at 11 per cent.
Grocers recently approached RioCan about growing their footprint, pharmacies are in "hyper expansion mode," discount retailers like dollar stores or Winners are looking for space and so are quick-serve restaurants, Gitlin said.
The pandemic push to prioritize health and take on furry friends is also shaping real estate, with Gitlin noticing
more doctors,
dentists,
clinics
and veterinarians
opening.
"Petsmart, they are growing and where Petsmart has historically been a larger box store, they're now looking for smaller, more urban spaces, so a condo owner can go get a dog leash or cat supplies," said Gitlin.
RioCan's retail portfolio, which features a large number of open air shopping centres in urban and suburban areas, is about 94 per cent occupied, but vacancies still loom.
The national vacancy rate experienced declines in the second and third quarter of 2021.
However, the rate has now tapered off at 4.1 per cent, commercial real estate company CBRE found through a quarterly survey of real estate investment trusts.
The survey, which covers about 30 per cent of the market and excludes storefront properties, revealed the bulk of available space during the first quarter was in regional shopping centres, where the national vacancy rate sat at 7.6 per cent, but was even higher in many locales including Halifax, where it reached 24.2 per cent.
In Toronto, Tim Sanderson sees people flocking to Yorkville, Queen Street and King Street again, but the heart of the Financial District is still rife with for lease signs.
"There's just people everywhere, but you're not seeing that in the core and you won't…until occupancy levels of the office towers get back up to where they used to be -- if they ever get back there," said the executive vice-president and national lead for retail at real estate firm JLL.
He believes the pace of growth in brick-and-mortar retail is "not going to be what it has been" because retailers are becoming more judicious and less likely to expand through 40- or 80-store plans like they used to.
He is seeing this from
the Gap, which announced it will close 350 stores by 2023,
and Starbucks which shed up to 300.
Sanderson and Arlin Markowitz, executive vice-president and head of the Toronto urban retail team at CBRE, notice property hunters are often seeking smaller spaces with curbside pickup infrastructure because they're increasingly relying on e-commerce and warehouses.
"Small space? No problem. Ground floor space? No problem," said Markowitz.
"Where you start to see problematic spaces are in the 15 to 30,000 square foot, two level boxes, where it was once clothing."
While those seeking space previously desired short leases to contend with pandemic uncertainty, Markowitz said companies are having the confidence to sign longer contracts again.
Many have even dropped COVID-19 clauses from leases, he said.
"We're at the best point that we've been at since before the pandemic," he said.
"Obviously, it's taken a long time, but we've seen a big recovery and a big shift in sentiment and momentum."
Retailers renewed confidence in brick-and-mortar fuelling surge in commercial leases - BNN Bloomberg
Jul. 29, 2022 "Vibrators and brass cutlery: Indigo ain't ya mama's bookstore anymore": Today I found this article by Bianca Bharti on the Financial Post:
Type “sex” in the search bar on Indigo Books & Music Inc.’s website and the first thing the algorithm tries to get you to buy is a copy of Come as You Are, a popular book by psychologist Emily Nagoski that uses scientific research to debunk misconceptions about doing the deed.
A link to the Kama Sutra appears high on the list of options. Scroll further and you’ll find tools that can put that reading list to work: about half way down the page, you’re presented with a series of soft-toned vibrators that are über minimalist.
It’s starkly different from what someone would expect from Indigo Books & Music Inc. just 10 or 15 years ago, when anyone who occasionally visited a Canadian mall would have been familiar with Indigo’s Chapters brand, which put books at the forefront.
“It’s a whole revolution around almost everything we do, whilst not losing the magic dust,” president Peter Ruis said from the company’s Toronto headquarters in mid-July.
Indigo’s board of directors, led by founder and CEO Heather Reisman, hired Ruis in February last year to transform Indigo’s business model. With more than 30 years in retail, the industry veteran, who hails from Britain, helped revamp companies such as Urban Outfitters Inc.’s Anthropologie and U.K. luxury department store John Lewis Plc.
Ruis insists the “magic dust” remains books, even though it’s getting difficult to call Indigo a bookstore. He said the drift from books is intentional, and key to the company’s survival in the age of online marketplaces, audiobooks and e-readers.
Over the past decade, the company’s growth ebbed and flowed as the book-selling game transformed. Readers swapped hardcovers and paperbacks for digital versions that took up just a few megabytes of space on their devices.
Amazon.com Inc. already had its own e-reader, the Kindle, supplementing its ability to sell far more physical books than anyone else due to the inherent lower costs of selling online.
Looking at the websites now, Amazon lists more than 80,000 paperbacks for sale, while Indigo’s website offers about 1,000 titles.
Indigo struggled for relevancy. Its revenue began consistently declining, dropping to $867.7 million in 2014 from $941.5 million in 2011.
No longer could the company be a “one-trick pony,” Ruis said. The era of a retailer selling just one category of items was over.
Reisman founded Indigo in 1996. Back then, books and music were core to the business.
That remained true even after the company merged with its main rival, Chapters Inc., in 2001.
A bibliophile could wander into a store and pick up the latest Stephen King novel and toss the newest Sum 41 CD in their basket on the way to checkout.
Throughout the aughts, the company started growing its non-book merchandise offerings, throwing up shelves of notebooks, racks for kitschy items, and stands for gifts and children’s toys.
Around 2014, Indigo leadership began playing with the idea of becoming Canada’s, and even the world’s, first cultural department store.
“Very simplistically, if we’re the biggest sellers of cookery books in Canada, why wouldn’t we choose an incredible, boutique offering of the best cookware to go with it?
Not be a specialist, not for a thousand pots and pans, but find the best range of hand-sourced products that will go with (cookbooks),” Ruis said.
That thinking is what led to an almost complete shake-up of the Indigo with which Canadians grew familiar.
Gone are the tables at the front of a store crowded with books. In their place are tables that show off stoneware serving plates with brass cutlery certain to make any one who subscribes to the clean-girl aesthetic salivate.
Racks are strewn about with “reading robes” and pajamas that invite coziness.
And yep, Indigo has gua sha tools, CBD skincare products, and vibrators among a whole host of beauty and wellness products that would thrill the likes of Goop Inc. founder Gwenyth Paltrow.
And the books? Those are mostly deeper in store now with a few selected titles peppered amongst the curated general merchandise. Even venturing on to the website, novels are hardly present on the main page.
Indigo locations now generally have a mix that’s 55 per cent books and 45 per cent merchandise, with newer stores maintaining a more even split, Ruis said.
In the last few years, Indigo has even created its own proprietary brands.
There’s Nota, the company’s line of notebooks;
Oui, a line for homeware;
and Love & Lore, its fashion brand — to name a few.
Ruis calls it the “modernizing” of Indigo.
“All the great brands have to reset to the way the world is and COVID reset all of us,” he said.
The strategy had been working from 2015, when revenue resumed climbing, hitting more than $1 billion in 2017. But a slowdown in the retail sector sapped momentum, before the pandemic dealt an even heavier blow.
In 2020, sales dropped below $1 billion, and the company operated at loss for the second consecutive year. Lockdowns heavily impacted its brick-and-mortar business.
Revenue at its large-format stores dropped in 2020 and 2021, bringing in $655.8 million and $439.8 million, respectively, compared to their peak of $728.6 billion in 2018.
The company saw a bright spot in online sales during the pandemic, bringing in $370 million during the 2021 fiscal year, the most money it’s ever made from e-commerce.
For the latest fiscal year, online sales slowed down while brick-and-mortar sales picked up.
Jammed supply chains,
high fuel prices,
and rising inflation
present a rocky road ahead for the company as the economy heads into a period of slower growth, and possibly even recession.
But Ruis isn’t busying his mind with what Governor Tiff Macklem is doing at the Bank of Canada to wrestle sky-high inflation and deliver a “soft landing.”
“Look, I’ve been in the business 30 years. Interest rates go up. Interest rates go down. Ports shut down. There’s issues all the time.
We lived, we worked through the 2008 recession.
We worked through COVID,” Ruis said.
“So we’ve been through probably the hardest time that you could ever be in and we all survived. In our case, done quite well.”
Still, Ruis is focused on maintaining reasonable prices for customers across all price points.
“We have lots of new, innovative things so they sort of demand the price they demand,” Ruis said. “We’ve been able to keep prices the same because we’ve added extra volume.”
He’s encouraged by the $280 billion in savings Canadians accumulated during the pandemic that could stimulate spending even as inflation consumes more disposable income.
And even though customers can purchase a set of four champagne flutes for $55, they can also find a stoneware bowl for $8.
“We’re sort of quite good at coming through these times in terms of giving people a little bit of joy when they can’t afford to buy everything,” Ruis said.
“(We’re) never forgetting we’re based in books, but we’re early days on all that general merchandise,… that wonderful, eclectic mix.”
• Email: bbharti@postmedia.com | Twitter: biancabharti
Indigo Books & Music Inc. ain't ya mama's bookstore anymore | Financial Post
So vibrators, dildo's and mein kamf are OK, but a book about the Freedom Convoy is to dangerous and must be banned.
You really do have to be mentally ill to be a liberal.
280 Billion in savings largely thanks to Justin’s money cannon, and now Heather, friend of the Liberals, wants to cash in.
I wouldn’t set foot in her stores.
Same comment as those who commented below - when a book store plays politics that bookstore becomes irrelevant. Another lefty business not interested in the truth.
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