Small Business | 2014

SMALL BUSINESS MONTH - SUppLEMENT TO THE WINNIpEg FrEE prESS - WEdNESdAy, OcTOBEr 22, 2014

Small buSineSSeS caShing in on better newS

for business. Saskatchewan is also performing strongly, although the agricultural sector there has suffered somewhat from flooding. British Columbia continues to show an impressive rebound, Mallett says. “We’ve seen that for some time. It’s been the most optimistic business environment in the country because of the more stable policy environment. That’s a big change from 2012, when it was underperforming in that respect.” Ontario and Quebec, on the other hand, continue to face policy uncertainties and fiscal challenges, he says. “There is no free money for governments to be spending on fiscal stimulus. Large debts have to be paid.” Eastern Canada’s economic challenges have not changed, as populations are aging and in some cases decreasing, which affects asset value and spending habits. The exception is Newfoundland and Labrador as a result of its oil and gas activities. The primary reason for the general optimism is the strengthening U.S. economy, says Howard E. Johnson, president of M&A International in Toronto. “Expectations are that that it will remain that way for the next 12 to 18 months.” He says many businesses servicing booming industries, such as oil and gas, are faring extremely well and becoming primary acquisition targets for

buyers. “We’re also seeing an increasing interest in succession planning as baby boomers start to retire, which can present challenges for business owners if they wait too late to start the process.” As a banker for more than three decades, John Roberts, vice-president of small business with Scotiabank in Toronto, believes these are very exciting times for small business. “I can’t imagine another time where there has been as much emphasis and focus on small business.” He notes that 2014 did start slower than expected. “Businesses across the country took a hit with the winter weather, but we’ve seen some very strong months of activity from May onward. The dollar rate has been great for manufacturers and exporters, and borrowing rates continue to be low.” He says for the most part in 2013, businesses were using their cash reserves. “We didn’t see the lending side rise. Rather businesses were self-funding. But there has been a spike in lending in 2014, which indicates increased confidence.” Bank of Montreal recently issued its latest business confidence report that confirms small business owners’ moods are on the upswing. The results show a three-point increase (from 65 to 68 out of 100) in confidence from earlier in the year. Fifty-nine per cent of owners also believe that 2015 will be a better year for business.

Denise Deveau Financial Post A s 2014 winds down, small businesses are feeling a renewed sense of cautious optimism. Ted Mallett, vice-president and chief economist for the Canadian Federation of Independent Business says small business tends to go where the economy goes and vice versa. “They are both leaders and followers in the economic cycle of things.” The most recent CFIB studies are showing growth is returning and optimism is rebounding, barring a slight “hiccup” in late 2013 and early 2014. “That was likely related to the weather, which made it hard for many operations,” Mallett said. “There were a few climate-related difficulties. The flooding on the Prairies, for example, tempered the agricultural outlook for many members.” These fears have subsided as businesses are getting back to normal, he says. “It’s not quite back to its potential level because we are still recovering from the shock of five years ago.” Sectors and regions continue to perform on the same trajectory as in previous years, for the most part. The booming Alberta economy is still creating capacity challenges and labour shortages

Grocers do the cookinG to lure in shoppers

Bill Mah Postmedia News

When Dave Hare opened the IGA in Tofield, Alta., 35 years ago, he went head to head with three rival grocers. These days, it’s the restaurants in town that are his main competition. Consumers’ growing appetite for eating out means fewer home-cooked meals, which means they’re buying fewer groceries to stock their fridges and pantries. But grocery retailers have turned the tables on restaurants by offering to do the cooking. A recent Tofield IGA weekly flyer featured layered dips, ready-made salads and trays of cold cuts and sausage rings for Thanksgiving. “People are time-starved,” Hare said. “The husband and wife both work, they’ve got a couple of kids with one going to dance and the other to hockey or football and they have to prepare a Thanksgiving dinner. So they’re coming to us for most of it already prepared.” According to Statistics Canada, Albertans spent $8.5 billon at restaurants and bars in the 12 months leading up to July. That’s an increase of 6.6 per cent over the previous 12 months, notes ATB Financial senior economist Todd Hirsch. “This growth is above the rate of Alberta’s population growth (2.8 per cent) plus annual price inflation of restaurant food (also 2.8 per cent),” Hirsch said. Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers, said the phenomenon called “home meal replacement” was a big topic of discussion at its recent conference. “We’re seeing this trend where consumers are now eating out more than they are making meals at home,” Barlow said. “So for the grocery sector to compete, they’ve got to be able to get a piece of that market.” Some grocery retailers have hired on-site executive chefs and others offer full hot bars filled with dishes like curry chicken and sea bass. “In a lot of cases, their cost to operate is a lot lower than a restaurant,” Barlow said. “They’ve already got the infrastructure in place and it’s a great way to use their own ingredients in the store.” For Hare, whose supermarket just won the grocers’ association’s Arnold Rands Heritage Award for best privately owned multi-generational store, he remembers when many supermarkets didn’t even have an in-store bakery, let alone a deli. They carried grocery, meat and produce and that was it. Now, he has a deli that prepares special meals that change every day. “We do sell lots of ham sandwiches, we make our in-store pizza, we got rotisserie chicken. You build from those things lots of in-store meals.” Grocers are even doing more of the prep work for their customers, chopping up fruit and vegetables, for example. “Our cut fruit has exploded,” Hare said. “I’ve even had comments from the seniors in town who say they love that because they can’t cut watermelons because they don’t have the strength, and do they want a nine- pound watermelon?” Hare is planning to almost double the size of the store over the next two years, and his deli and bakery will both be expanded. That will mean half the store’s retail space will be devoted to prepared fresh foods, meat and produce, while the other half sells non-fresh groceries. “In the old days, I probably would have had 15 per cent fresh.”

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