Analysts expect British Columbians to return in droves to physical stores this Black Friday, and holiday season, as they visit shopping malls instead of shopping online.
Uncertain supply chains are fuelling that trend, say analysts. Canada Post has given the entire province of B.C. a yellow service alert, which means that carriers will attempt deliveries but there may be delays. The national mail service has suspended delivery to parts of the province, such as Abbotsford.
Courier companies also have warnings. Puralator has temporarily suspended its on-time delivery guarantees for all express courier shipments to and from B.C., while Fedex is servicing parts of the Interior from Alberta, potentially causing delays.
Heavy flooding in the Fraser Valley, and limited truck access to highways that connect the Lower Mainland with the rest of the province, has heightened consumer fears that online purchases could be delivered late, said retail analyst and DIG360 owner David Gray.
“Shoppers will have less faith that online shopping can deliver directly to the buyer, or gift-giver, accurately, and especially on time for holiday gift giving,” he told BIV.
Global supply chains were crimped for much of 2021 – long before the Nov. 13 through 15 atmospheric river drenched much of the province with decimetres of rain. Much of the global supply slowdown was induced by strong demand for everything from furniture to electronics to sporting goods, as people spent less on travel, entertainment and restaurants because of COVID-19 restrictions.
London Drugs president Clint Mahlman told BIV last month that he foresaw product shortages.
“Don’t wait,” he said. “Don’t shop around, because it may not be there a few weeks later, just because of this very unpredictable supply chain.”
In addition to buying products in stores, consumers may increase so-called curb-side pick-ups, where they collect online purchases at physical stores, Gray said.
Forward-thinking retailers increased inventory above previous levels to ensure products stay in stock.
“We’ve been working closely with our vendors to make sure that we’re in a good inventory condition,” Burnaby-based Best Buy Canada’s director of retail and Geek Squad service operations, Phil Thampy told BIV.
“We’re going into Black Friday, already almost 10% over last year in terms of our on-hand inventory.”
Preparing for shortages ahead of time has meant that Best Buy is equipped at stores in Kelowna, Vernon, Kamloops and Prince George, he said.
Extra efforts, to ensure those stores are stocked, have included airlifting some products, and otherwise diverting products from Alberta, Thampy said.
Instead of having a major blow-out sale on a single day for Black Friday, parent Best Buy Co. Inc. (NYSE:BBY) has embarked on a strategy that is also being forged by large U.S. retailers, such as Target (NYSE:TGT) – to spread out specials and discounts throughout the holiday season.
Thampy said Black Friday deals started to appear early in November, and consumers should expect new deals launching in December, and on Boxing Day.
Retailers this year may struggle to outdo last year because sales in late 2020 were so strong.
Gray said retail sales in October and November, 2020, were upside surprises for many retailers, as consumers splurged to combat COVID-19 fatigue. December spending last year was also strong, although slightly weaker than October and November, he added.
As such, even if retailers match last year’s performance, they should be pleased, Gray said.
Professional services firm JLL this week released its 2021 Retail Holiday Survey – a report that similarly predicts that Canadians will return to shopping centres “on a grand scale,” in part to pick up online shopping items, but also to shop, eat and enjoy being in social environments.
COVID-19 variants of concern, such as the infectious Delta strain, are not likely to deter shoppers this holiday season, or into 2022, JLL said.
“In October, overall consumer spending remained about 20% above pre-Covid-19 levels,” JLL’s report said.
“Canadians continue to plan for a significant increase in their spending.”
The report projected that core Canadian retail sales for the full year of 2021 would increase by a double-digit percentage, compared with 2019.
Shopping centre owners agree that traffic is improving, depending on the location.
Downtown shopping centres continue to underperform.
“With many office occupants still working from home, and fewer tourists in Vancouver, urban shopping centres, like CF Pacific Centre, are still lagging behind the 2019 traffic levels," said Tom Knoepfel, who is senior vice-president of Cadillac Fairview, which owns Metro Vancouver malls such as CF Pacific Centre and CF Richmond Centre.
“We have seen a strong increase in foot traffic in our shopping centres over the past several months, approaching 2019 levels for comparable time periods."
Cadillac Fairview has decorated CF Richmond Centre with larger-than-life holiday décor, and Knoepfel anticipates that the return of Santa will help attract families.
"We are seeing people are on a mission to shop, and sales are increasing at a steady pace – we’re confident we’ll get back to pre-pandemic levels as restrictions continue to gradually lift," he added.
