Retail After Pandemic: Business Council of Canada

COVID-19 is reshaping retail. To help retailers navigate the new reality, we released our Crisis Manifesto: How retail will change post-Coronavirus report and featured startups like BRIKA, Foko Retail, and Ampli by RBC Ventures in our retail innovation series. Here’s Brian Kingston, Vice President, International & Fiscal Issues, Business Council of Canada sharing thoughts on what businesses can do to survive the pandemic fallout.

What do you think medium- and long-term impact will be for the rest of 2020?

Looks like we will have to think of implementing many of the current social distancing and safety measures for the rest of 2020. The impact is catastrophic — we’re expecting a decline in GDP by 25%. This is going to be bad for all businesses and sectors across the Canadian economy. The areas hit immediately — energy sector, tourism, bricks-and-mortar retail, travel, they are all feeling a very significant impact as a result of this. We have 3M Canadians applying for CERB already, and so consumption will be down, which is damaging for the economy.  Medium to long-term — we will contain it eventually and come out on the other side, but if we see spikes up again in the fall, this could mean we’d be climbing out of the valley for the remainder of this year.

How should retailers large and small prepare for the road ahead? 

Retailers, no matter the size, have to be prepared for scenarios — especially if they’re non-essential, — that this will go for a long time, and for measures that involve social distancing. If you’re working with that assumption, trying to find ways to reach your customers digitally with home delivery and in other ways that would enable companies to remain operational is priority #1. If you are deemed non-essential, think about how the phased-in back-to-work plan looks like for your business. Do you have the physical space to allow for people to return to work with appropriate social distancing. Do you have the ability to protect your employees if required? Retailers may be allowed to open again but there may be strict rules and guidelines around protective equipment and how many people are allowed in the store. There’s a real chance that this becomes our reality.

Small retailers will be looking at lower throughput if we phase-in slowly, but this can be managed if companies step up and put processes in place to let customers come in and do what they need to do relatively quickly. Big box retailers like Best Buy have a lot of space, and social distancing measures will have to be put in place, but they may also have to look at their sizable rent liability and how they can best protect their consumers and employees.

Are there any specific programs/efforts that Business Council of Canada has to support small/medium-sized businesses that you would recommend / want to share?

There’s a couple of major programs worth mentioning here, benefitting small and mid-sized businesses in retail, who are being hit quite hard. 

Canada Emergency Response Benefit, which is a $2K payment to furloughed employees. If your company isn’t operational right now, because your revenues have fallen to virtually zero due to the shut down, your employees can apply through CRA, and you can keep the connection to your employees, while allowing that program to support your employees financially. And then there’s Emergency Wage Subsidy: If your business is seeing revenue drop, you can apply to cover 75% of wages. Application happens through CRA and I think this is a very helpful program for companies without large cash reserves. For the tech sector in particular, the connection between employers and employees is really important; the last thing you want to do is layoffs, making it harder to restart once we are past this, and we hope government will be flexible and introduce new tests to address this.

What are Business Council of Canada hearing from the retail sector?

Overall, of course we hear a great deal of concern. This is unprecedented; we’ve never lived through something like this before. 3 weeks ago, our members called on the government to take strong action to contain this and close down non-essential services. It is a surreal environment where we are actively looking at measures to close down the stores, and of course we also will see a huge economic impact.  

We represent CEOs of 160 Canada’s largest companies. Companies providing critical services – grocery, drug stores – are absolutely essential and they have really stepped up. Loblaws in particular came out strong and reassuring. There was an element of panic, and the communications that came from Loblaws helped people understand we are not facing product shortages — yes, there will be supply chain challenges, but the shelves are stocked. These companies were able to move quickly to put measures in place to protect their employees and customers: metering the number of people that come in, there’s plexiglass protecting employees and walls between lanes. More companies should be putting plans and processes in place for how they communicate and operate as a business in 2020.

Any COVID-19 examples you can share, with startups and tech companies working with Business Council of Canada or directly with retailers right now, to drive change and help surviving the pandemic?

I’ve witnessed a lot of interesting initiatives from Shopify, to encourage companies in retail to use their platform and sell online, to give them additional potential to earn revenue. That’s been encouraging. We’re seeing this a lot in the PPE space; lots of our big members working directly with startups and tech companies to pivot very quickly and build protective gear here in Canada. Linamar auto parts maker company and O-Two medical technologies, based in Brampton — so we are seeing interesting partnerships that would never occur in the normal course of business, and some of these partnerships may be how we create more resiliency in the Canadian economy. It’s fine to rely on global supply chains, but we will be taking a second look at our domestic capacity.

I’d urge businesses to work with the government and internally to try and develop a plan — once we have contained or appear to contain the first wave, how do we phase in the back to work program to protect employees and Canadians. This won’t be “you can all go outside now, we’ve moved on.” Businesses need to work with the government to plot that plan and look at examples around the world. This is a new reality, until we find a vaccine, and so it’ll change how we do business, probably for the remainder of 2020. Even if it’s largely contained, there’s always a risk, particularly as travel rules ease, we have to make sure businesses are prepared to deal with that.