Merchant Advance Blog

Blog Article: Canadian Retail: Staying on Target

The Canadian retail landscape has endured a series of shakeups in recent weeks, with large chain retailers Sony, Target and Mexx announcing plans to close stores across the country. Other medium to large-scale retailers such as clothiers Jacob and Smart Set have suffered similar fates.

These closures are a rather gloomy way for Canadian retail to start the year, however they also provide opportunities for introspection and examination of wider effects and lessons that may reverberate into the small business community.

The Case for Space

Much has been made of the large volume of space now left vacated by these exiting retailers (Target in particular, whose now-empty s may total 100,000 sq. ft. per store.) Some spaces such as these may be repurposed and divided into smaller parcels of square footage more suitable for smaller businesses seeking exposure in urban centres. Space and location are key concerns for small businesses, especially given the ways in which commercial landscapes develop around the mechanics of affordability and exposure for different types of retailers.

A Study in Stock

Target was criticized relatively early on in its Canadian tenure for issues concerning stocking and product availability. The Globe and Mail noted the importance of this issue in a recent post-mortem for the retail chain.

“… for retailers, inventory management is crucial to customers’ perceptions of a brand. If shelves are out of stock, and customers leave empty-handed, research has shown that many of them will not come back.”

Small retailers may not have to manage inventory on such a massive scale as a multinational chain, but management and display of diverse and compelling inventory is certainly a weighty issue for businesses of any size.

A Canadian Community

Some of the discussion surrounding Target and Sony’s withdrawals from Canada has focused on the economic motivators that drive international companies to experiment with the Canadian marketplace. Many Canadian small businesses are notable for their creation of customer loyalty and a sense of community – qualities that are difficult to find and foster in a much larger chain entity.  Many cities, towns and neighbourhoods rely on the input of small businesses to provide essential goods and services where infrastructure does not exist for major retailers to take hold.

On the other side of this equation: in some locations, major retailers become fixtures in the local economic landscape. The displacement effect of jobs and commercial activity may hit these communities particularly hard. This is a case where small business activity could encounter peripheral negative effects as a result of the poor performance of larger commercial entities.

Merchant’s Take

Merchant Advance Capital’s funding practices have been designed to help small businesses find ways to meet many of their operational needs. These include, but are not limited to, some of the needs discussed above: the need for space, the need to manage inventory, and the need to help create infrastructure and identity in your local economic community.

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