The Bike Doctor general manager Gray Myrfield helps a customer in Vancouver on Aug. 21, 2020.Jackie Dives/The Globe and Mail
Despite a massive hit to the economy from COVID-19, consumers are still spending – and that’s created a windfall for companies that can thrive under pandemic restrictions.
In just two months, retail sales have bounced back to precrisis levels, a V-shaped recovery bolstered by income support from the federal government and pent-up demand. Meanwhile, pandemic constraints have forced people to cancel travel plans and redirect spending.
At the expense of other industries, Canadians have embraced a staycation summer that favours backyard barbecues, canoe trips at provincial parks and family bike rides to the beach.
The result is a consumer run on everything outdoors, leading to shortages of kayaks, patio furniture and pressure-treated lumber. In some cases, supply shortages will extend into 2021.
“We’ve been largely surprised with how quickly consumer spending has recovered to year-ago levels,” said Colin Guldimann, a Royal Bank of Canada economist. “Spending on outdoor entertainment – things like golf courses and campsites – is up significantly.”
In May, the outdoor boom heated up. Sales of patio furniture surged 46 per cent compared with a year earlier, according to a Statistics Canada survey. Bicycle sales rose by 60 per cent. Sales of plants and garden supplies increased 12 per cent. Sports equipment jumped 29 per cent, with hunting, fishing and camping equipment up 11 per cent.
At High Level Canoes & Kayaks in Lethbridge, Alta., several products are sold out. Many people have turned to renting kayaks and stand-up paddleboards one to two weeks in advance. “Especially on these hot weeks, we usually have nothing left for rentals,” sales associate Abigail Pohl said.
Whispering Springs Wilderness Retreat is a luxury camping getaway about a two-hour drive east of Toronto.Supplied
The Bike Doctor in Vancouver has been sold out of bicycles for about a month, like many cycle shops across the country. “For a long time, we couldn’t get bikes built and put on the floor – people were buying them in boxes,” said Gray Myrfield, the store’s general manager.
Within a month, the store will receive a new shipment of bikes – but already, about half have been sold. “We don’t know when it’s going to stop,” Mr. Myrfield said.
The summer of 2020 has been something of a revival for golf. At the Riverside Country Club in Saskatoon, 40 per cent more people teed off in June than in the same month a year ago – only for the club to see a 78-per-cent bump in July as it reduced intervals between tee times. “We are booked morning to night,” executive director Robert Klombies said by e-mail.
The pandemic has been a whirlwind for Jaclyn Kelly of Toronto. Earlier this summer, Ms. Kelly and her husband ordered a stock tank – essentially, an oversized metal container – to create a backyard swimming pool. Stock tank pools have emerged as a stylish, Instagram-friendly alternative to above-ground pools, suitable for small yards and budgets. What ensued was plenty of interest from strangers and the couple launched a business, Salt Shack Backyards, last month.
With families unable to travel as they could before, “people are really craving an oasis,” said Ms. Kelly, whose husband was out doing nine deliveries on a recent weekday. “We already have people preordering for next year.”
The retreat has been booked solid from late June through to the end of its season in mid-October.Supplied
While the travel industry has been slammed by COVID-19, that’s not the case for Whispering Springs Wilderness Retreat in Grafton, Ont., about a two-hour drive east of Toronto. The luxury camping getaway has been booked solid from late June through to the end of its season in mid-October. “Everybody is desperate to get out and do something, but everybody’s nervous and afraid of getting on a train, getting on a plane – anything like that,” co-owner John Corcoran said.
As habits change, there’s been a painful reallocation of dollars. Many people are buying goods rather than services, such as groceries instead of restaurant dining. “Retail sales do not tell the whole story,” said Jocelyn Paquet, a National Bank of Canada economist. “Consumption of goods is bouncing back a lot faster than consumption of services.”
But it’s possible consumer spending will fizzle. Last Friday, Statscan estimated that retail sales barely budged in July, following a record-setting increase in June. “It’s certainly not business as usual for the retail space, and the months ahead are likely to reveal a dramatic slowdown in momentum with the potential for some backsliding,” Royce Mendes, senior economist at CIBC World Markets, said in a client note.
Even for retailers riding the boom, the summer has created headaches. Ms. Kelly of Salt Shack has struggled to source pool pumps. At High Level in Lethbridge, sales aren’t wildly different from past years, but restocking is a challenge. And Mr. Myrfield’s suppliers say other bike shops are doubling up on orders for next year, signalling another shortage.
“Instead of planning to order half our year’s stock [for 2021], we now need to plan to order all of the year’s stock,” Mr. Myrfield said. “What do we plan if this bubble bursts? … We have no idea.”
Still, with other companies filing for bankruptcy protection or closing for good, the situation could be worse.
“I don’t want to complain – there are businesses in way worse shape than ours,” Mr. Myrfield said. “We’ve definitely benefited off of this rush.”
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Matt Lundy