Some small business owners in Winnipeg say they need support more than ever as their profits shrink due to inflation, rising interest rates and higher costs.
At Pollock’s Hardware Co-op, which celebrated its 100th year of operation earlier this year, its margins have grown so thin, it’s keeping track of every dollar.
“We monitor the money flow daily,” said Luba Bereza, chair of the co-op’s board.
“We check the bank, we figure out who we can pay, who we have to put off. We have to make those decisions every day so we can stay open.”
Bereza said even as holiday sales pick up, the North End hardware store will just barely finish the year in the black — by a margin of only hundreds of dollars.
She said the store is caught in a vicious financial cycle: as customers’ buying power shrinks with rising prices, so does the store’s.
“People have to make decisions,” said Bereza. “Do you buy that expensive drill, or do you just make do with what you’ve got?”
“Then it becomes a kind of a circular issue,” she said, adding that costs of goods, transportation, and wages have all been going up.
This has Pollock’s managers negotiating with suppliers, said Bereza, asking whether they can order fewer products but still get the reduced prices that come with bigger purchases.
“It’s a little bit exhausting [for staff] who have to deal with the constant questions like, ‘You don’t have this in stock?’ Or, ‘When is this coming in?'”
“And when people don’t see enough stuff in the store, they don’t come in,” Bereza continued. “So it’s kind of a tough circle to get out of.”
Just up the street, Modern Coffee owner Allison Slessor is begging for support as sales continue to lag.
Slessor said the new business was just taking off when the COVID-19 pandemic hit, and it still hasn’t recovered from the lockdowns.
News of more health crises affecting hospitals has her worried.
“Panic has struck,” she said. “What happened before, is it going to happen again?”
‘It’s month-by-month now’
Slessor said soaring food costs and interest rates have slowed her cash flow to a trickle. She’s had to lay off some staff and slash the hours of others.
“It’s month-by-month now, and it’s hard,” Slessor said, holding back tears.
“I’ve had to make cuts that I’ve never wanted to make, and it really breaks my heart.”
Slessor now runs the shop almost single-handedly, even doing her own equipment repairs.
“People come in and they’re like, ‘Oh, it’s a miracle you made it through,'” she said.
“But making it through the pandemic wasn’t a miracle. It was me working all the time. Me, taking out loans that I’m going to be stuck with.”
Shop locally, says federation
The Canadian Federation of Independent Business is calling on Manitobans to shop locally, promoting events like Small Business Saturday, which falls on the weekend after Black Friday.
But it says there’s also a lot that governments can do to help.
“A lot of businesses were able to hang on during the pandemic with the help of pandemic support programs,” said Kathleen Cook, the federation’s director of provincial affairs for Manitoba.
“Those programs dried up and now we’re starting to see the resulting closures of local businesses,” she said. “Some of them have been pretty high-profile, some of them have been under the radar.”
The federation is asking the federal government to extend the repayment deadline for COVID-19 business relief loans, and to expand the forgivable portion.
“Provincially, we need to see movement on labour shortages and the overall tax burden, given all of the rising costs that small businesses are dealing with right now,” said Cook.
“Every little bit helps.”
In a statement, a provincial spokesperson said it’s been pouring millions of dollars into programs to help businesses train employees and pay wages, and has also made cuts to payroll taxes.
“The province will always work to ensure Winnipeg businesses remain thriving and competitive in the current global economic landscape,” said a spokesperson for the provincial minister of economic development, investment and trade.
But Cook said the situation facing many small businesses calls for more immediate action.
“They’re not sure if they’re going to make it through the next six weeks,” she said. “They don’t know if they can make payroll. For them, it absolutely is an emergency.”
Slessor hopes customers think of what her cafe means to them as they pick up holiday gifts, pointing to a display case of branded hoodies, bags of beans and coffee accessories.
“We need this space in our community,” she said.
Slessor said chain-store cafes can’t match the ambience of Modern Coffee, a cozy spot decorated with plush, vintage furniture and Winnipeg memorabilia. Her shop encourages customers to connect with their neighbours over a board game or pick up one of the house guitars and jam.
“People need to remember local businesses,” said Slessor, “because if we don’t, [Winnipeg] is just going to be a bunch of big-box stores.
“And that would be very sad.”