A shift in employment trends has seen foot traffic and subsequent sales drop in the downtown core’s local businesses, and even if outlying residential areas like Etobicoke, North York and Scarborough are able to scrape off some of that business, some of it just disappears, experts say, striking a heavy blow as small businesses grapple with COVID-19-accrued debt.
The spring 2022 survey of remote work from the Environics Institute’s latest wave of research on the topic found that almost half of employed Canadians are working from home at least some of the time.
It also found that 76 per cent of those who had started remote work during the pandemic would agree that the employer should continue to offer the option to work from home, even after the viral outbreak.
“I definitely think the pandemic was an inflection point, we were already seeing trends for more remote work prior to the pandemic,” Brad Poulos, lecturer of entrepreneurship and strategy at Toronto Metropolitan University, said, noting that his daughter and partner had already gone remote even before COVID-19. “The pandemic, what it did was it proved that you could do it … so now employers can be a little bit more comfortable adopting a total switch to remote work for some jobs or a hybrid model.”
TTC ridership has plummeted since the pandemic, with the transit agency forecasting a return to 75 per cent of pre-pandemic levels by the end of 2023, modestly up from 69 per cent in December 2022.
Riley Locke, policy analyst at the Canadian Federation of Independent Business (CFIB), said that this shift and drop in foot traffic has impacted local small businesses, with 61 per cent of them reporting a lack of customers and around half with sales that are below usual.
He emphasized that there are other trends influencing these numbers as well, with high inflation and high cost of living potentially contributing to reduced spending habits.
Poulos, for his part, has seen a “devastating” impact on local businesses from the reduced foot traffic, with locations like the Eaton Centre-adjacent Atrium on Bay Street closing nearly all of its fast food places.
He recounted a story of being unable to offer assistance to a convenience store operator who asked to help survive the pandemic. He said he couldn’t offer any help as without the convenience of a nearby location for workers who may now be remote, there is no reason to visit.
Any business that requires location as its competitive advantage and which leans on office workers for income will be a hit hard, Poulos concluded.
“Perhaps, at the margins, some of the suburban-located businesses have scraped off some of the businesses that would normally be accruing to downtown-located businesses,” he added.
Meghan Mesheau, co-ordinator with the Etobicoke-based Village of Islington Business Improvement Area (BIA), has seen this trend.
With the boom in remote work, he said their local businesses saw more foot traffic, grabbing local lunches and visiting nearby fitness centers rather than downtown gyms.
Poulos warned that this benefit might be mitigated by the fact that working from home, people can prepare their own coffee and food rather than go out at all, meaning while there is some shifting of the economy, some of it also just disappears.
For his part, Robert Sysak, executive director of the downtown West Queen West BIA located near Kensington Market, has seen a slowing in weekday foot traffic. Weekend traffic remains good, however, which its attributes to the neighborhood’s flavor and ability to act as a unique destination downtown.
Both the BIA workers and Poulos agreed that the current state of things for small businesses is not good. Even without the foot traffic changes, most businesses have, as of an April 2022 CFIB release, taken on an average of $160,000 of debt just to survive, with prospects looking even more grim as sales and customer bases dry up.
However, this may just be the cost of entrepreneurship.
“The truth is, you just gotta compete better in a time like today,” Poulos said.
STORY BEHIND THE STORY: Reporter Alice Chen wanted to dig into how remote work and foot traffic shifts were affecting local small businesses. In the process she discovered a somewhat direct picture.