Slow to moderate growth for independent retailers predicted

Rame Edwan and Nabaz Arif are cautiously optimistic about their  Port Coquitlam barbering business for the coming year. - DIANE STRANDBERG/THE TRI-CITY NEWS
Rame Edwan and Nabaz Arif are cautiously optimistic about their Port Coquitlam barbering business for the coming year.

Taking a break outside their busy Port Coquitlam barbershop, Rame Edwan and Nabaz Arif are cautiously optimistic about their business for the coming year.

Like most small businesses, theirs struggles with escalating costs and increasingly thrifty consumers. Still, they like PoCo's small-town feel and are pleased with the success of their two-year-old business so far.

"Business is OK," says Edwan, the owner of the Shaughnessy Street barber shop. Then, looking around at the fog-enshrouded streetscape, he said, "You have everything you need [in PoCo]."

He's proud of his shop that draws customers from Coquitlam and Maple Ridge, and his colleague isn't above a little spontaneous salesmanship. "We do families, and kids, everybody," Arif says.

It's that kind of attention to business that may mean the difference between staying afloat or succumbing to an increasingly challenging business climate.

According to Mark Startup, vice-president of the Retail Council of Canada, the pre-2008 years of robust sales and profits have been replaced by tighter profit margins and a more competitive business climate, and 2013 is expected to be a year of modest growth.

"We're not going backwards, we're certainly not growing by leaps and bounds, like we were in the pre-2008 period," Startup said.

Last year saw some growth in the number of business licences issued in Port Coquitlam and Port Moody, with a slight reduction in Coquitlam, although the region's largest city is still waiting for some business owners to pay their fees, which could account for the reduction at the time The Tri-City News went to press.


And this year's numbers are hard to predict because of the new Intermunicipal Business Licence that was implemented on Jan. 1.

Port Coquitlam business

Startup said the Tri-Cities is in line with the rest of B.C., where independent retailers are seeing modest gains in sales offset by higher costs due to inflation or increased transportation expenses.

But he noted, "It becomes very challenging to generate a net profit on a modest increase in total sales."

While in the past, retailers may have demanded year-on-year hikes in sales and revenue, now they are adjusting to the "new normal," Startup said. "Retailers are now seeing no or very little growth in their total retail sales and they are quite happy to achieve those results."

One of the issues retailers faced in 2012 was a boost in cross-border shopping but — surprisingly to some — the phenomenon didn't result in fewer dollars being spent in B.C. More people took day trips across the border to purchase goods, Startup said, but there wasn't a huge increase in overnight stays, which allows shoppers to bring back more without paying customs fees.

"Cross-border shopping is on the rise. It doesn't mean that there is a reduction in total spending in B.C. directly as a result of the number of dollars that people are spending across the border."

But he noted that every business is different and it's difficult to predict success or failure because there are so many factors involved. Some do better than others, some are more adept at adjusting costs or finding unique ways to attract customers, while others have to deal with fluctuating commodity prices.

"Have you seen the price of coffee lately?" Startup said.

"There are some stores, companies that are trying to recover from sales reductions in the 20% to 50% number from 2008, and you have some stores that have been able to generate the same sales in 2012 as compared to 2008 and feel good about it. And in other cases we are seeing rapid and atypical growth in some companies, beyond the average consumption," he said.

Businesses best poised to operate in such a challenging environment, Startup said, are those that have a strategic plan, are innovative and open to new ideas, and pay attention to the details, such as keeping a lid on costs.

Meanwhile, the Canadian Federation of Independent Business has this week released its red tape report cards and has declared Jan. 21 to 25 Red Tape Awareness Week. CFIB gave the federal government a B+ and the B.C. government an A for reducing regulations that affect business, among other things. The full report is available here.

Business licences issued

- 2011 and 2012

2011 2012

Coquitlam 6,046 5,848

PoCo 3,117 3,204

Port Moody 2,483 2,725


• Coquitlam business licence numbers reflect those paid up for the year at the time of inquiry but the number could rise.

• PoCo numbers reflect a "snapshot" of licences taken in November.


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