Government Street, Downtown Victoria, B.C.

Dec 1

BLOCK REPORT ROUND #2: NOVEMBER 2020

This report was prepared during the months of October and November 2020 based on conversations with the Downtown Victoria Business Association and local business owners, a business survey and a variety of other data sources. It provides an update to the Round #1 Block Report produced in July 2020.

Summary

Pre-COVID, this block of Government Street had a healthy mix of local retail and was a busy destination for daytime workers and tourists. It includes 67 business: 61% are independently owned and 54% said business was booming pre-COVID.
There were almost 1 million fewer visits to this area from April to September in 2020 compared to 2019 (a 63% decrease). Of all the 7 Block Studies, this block had the starkest reduction in visitors, reflecting the missing tourists and daytime office workers.
Most of the businesses on this block are operating with decreased revenues compared to last year. Revenues of tourism-focused retail businesses are down around 90% according to local reports. Other businesses that relied on international tourists, such as the restaurants and high-end retailers are also struggling.
Locals from the surrounding neighbourhoods and across the City of Victoria who normally stay clear of the downtown to avoid tourists, visited this block over the summer and supported local businesses.
Businesses report that this block has seen increases in vandalism and crime with 77% of businesses said that increased crime/safety issues in the neighbourhood is one of their biggest challenges. Across the city, supports for vulnerable populations, including those experiencing homelessness, mental health, and addiction challenges, have not kept pace with growing levels of need.

Business Survey Highlights

We conducted a survey of local businesses on this block to better understand the impacts of COVID on the street. Here is what we learned:

77% of businesses are operating with fewer staff than pre-COVID
54% of businesses said business was booming pre-COVID and 38% said it was going ok
69% of businesses said that their business is seeing fewer customers resulting in reduced revenue
42% of businesses said they had debt pre-COVID and 80% said they had received some relief on that debt
77% of businesses said that increased crime/safety issues in the neighbourhood is one of their biggest challenges
69% of businesses said that they would like governments to focus on encouraging shopping at local/independently owned businesses
38% of businesses said that they have been positively affected by doing more businesses through online delivery platforms

“I think in Victoria right now the major problem we have is our street issues and community perception around our downtown. I think it is our biggest battle.” – Local business owner

Government Street During COVID-19

Key Impacts:

There were almost one million fewer visitors to this area from April to September in 2020 compared to 2019. Of all the 7 blocks studies, this one had the starkest reduction in visitors, reflecting the missing tourists and daytime office workers.
85% of the businesses reported decreased revenues and more than half (54%) reported revenues less than 50% of pre-COVID revenues. Tourism businesses on this block continue to suffer the most.
Five of the businesses on this block have permanently closed since COVID, including: a general store, a clothing store, a law office, and a souvenir gift shop.
Market rent in this neighbourhood has decreased by 2% but is up 9% for the City of Victoria as a whole.
While many businesses brought back or hired new employees over the summer, 75% are still operating with fewer staff.
Many services and facilities serving vulnerable community members, including those experiencing homelessness, mental health, and addiction challenges, have been disrupted or had their services limited due to COVID restrictions. This has put additional strain on the most marginalized, and created challenges for local businesses which do not have the resources to offer supports, and are concerned about perceptions of public safety among their customers.
There has been an increase in crime and vandalism in the downtown and there is a growing perception that the downtown is unsafe.
62% of businesses have experienced supply chain issues (e.g. propane heaters for patios) to some degree. Smaller businesses seem to have more of an issue with this, since suppliers see them as less of a priority.

Bright Spots:

While summer is usually a time for tourists on Government Street, many locals (from surrounding neighbourhoods and across the City of Victoria) took the opportunity to come downtown to shop and dine; 23% of businesses said they were positively impacted by more customers from the local neighbourhood.
Although visitation numbers were down significantly on this block (-63%), businesses reported that people were more purposeful with their trips and tended to purchase something if they entered a store.
The patio program on Government Street was considered a success. Many businesses took advantage of the program and expanded their patios onto the street. While there were some challenges and the program didn’t benefit all businesses equally, people really embraced the patio culture which brought a lot of vibrancy and foot traffic to the block.
Government financial aid programs, such as the wage subsidy and the commercial rent assistance helped businesses to stay afloat despite reduced revenues. For example, with the support of the wage subsidy program, Munro’s Books was able to hire some temporary, part-time, seasonal staff over the summer.

What’s Next:

There is a lot of optimism that new federal government rent program will be better for small business and this will help them to make it through the winter.
While there have been some inquiries for downtown business space on Government Street and market rents have decreased slightly, larger vacant retail spaces (e.g. where the Gap was located) will likely be a challenge to fill.
Government offices, which make up the majority of daytime office workers in this area, have continued to encourage employees to work from home. The BIA predicts that if they don’t have 65% of office workers back soon, many businesses will close.
The summer gave an opportunity for locals to enjoy this block usually dominated by tourists. People will continue to need encouragement to come downtown and support their local businesses, especially during the darker and rainier months.
Some older businesses are considering closing and others have already closed. There is a possibility of defining a new retail strategy for this block to focus more on local food and retail.

Block Story: Jessica Walker, Munro’s Books

Jessica is the Managing Partner at Munro’s Books, one of the oldest bookstores in Victoria. The bookstore has been around for 57 years and considered by many to be a local institution in the downtown.

Jessica said that over the summer business was better than she expected, in part because there were more locals than usual in the downtown. However, revenues were still down around 25-30% and she was forced to reduce the number of employees by about 20%. Jessica, says that the wage subsidy was very helpful, and they were able to hire some temporary, part-time, seasonal staff over the summer. The Munro family owns the building that the bookstore is in, so they haven’t had to deal with a lot of the landlord-tenant issues that many small businesses are facing.

Munro’s Books employed a strong social media presence during the pandemic to stay connected to customers and the community. They also experimented with different operational strategies, such as low flat-rate shipping in order to encourage online ordering. Jessica says she is in full support of the City of Victoria patio program, but there is also a need to ensure there is balanced access to businesses for everyone, including those with accessibility needs and couriers.

While the holiday season is typically the busiest time of year for Munro’s Books, Jessica expects revenues to be much lower this year. Limitations on the number of customers means they simply won’t be able to process as many transactions. That said, Jessica sees that people are starting to think more carefully about how they spend their money and trying to better align their consumer behavoiur with their values.

Looking into the future, Jessica contends that businesses will continue to face challenges into 2021. She sees an opportunity for governments to review their procurement policies in order to support independently owned businesses.

What Governments and Others Can Do

Hyperlocal strategies on mental health, addictions, homelessness and street involvement are becoming of increasing importance to address the safety issues in downtowns like Victoria. Governments also need to work together to address these issues and ensure there is targeted funding available for local organizations working in this area.
Big employers, including governments can encourage office workers to come back to the office when it is safe to do so, especially in areas of BC like Victoria, where COVID case numbers are low.
Governments, business associations and other advocates are working to drive home the ‘buy local’ message; 69% of businesses said they would like to see governments and other main street advocates to encourage shopping at local/independently owned Canadian businesses. DVBA is focusing their efforts this year on marketing campaigns that encourage people to support their local businesses. Other policies and incentive programs that encourage local shopping can also support small businesses.
Local governments should take the winter to evaluate their patio programs including the impacts on safety, social inclusion, accessibility and different types of businesses.
Focused financial support from the Federal government is needed for the hardest hit tourism and hospitality industry.

About This Block

Downtown Victoria serves as the city centre and the central business district for the City of Victoria and the Greater Victoria region. The downtown has a healthy and vibrant economy, that includes a mix of retail, accommodation, and food service businesses.

Government Street is perhaps the most recognizable street in Victoria. The historical architecture, tree-lined sidewalks, shops and restaurants typically attract both locals and visitors from around the world.

This block includes a combination of tourism-focused retail (think, t-shirts and maple syrup), as well as traditional retail. There are both chain stores such as the Running Room, Patagonia and independent retailers like the Kamboodles toy store and the well-loved Munro’s books. A few restaurants and two pubs (Earls and Irish Times) draw both tourists and locals throughout the day. This block also includes one of the entrances to the main downtown mall, The Bay Centre.

Pre-COVID, Government Street was a popular lunch and shopping destination for day-time staff working at nearby government offices. It was also a main pedestrian route and destination for cruise ship passengers throughout the summer months. The nearby Summer Market was a big draw on weekends.

Provincial COVID Context

British Columbia has the fourth highest Covid-19 case count among Canadian provinces with over 27,000 cases. Beginning March 18th, the provincial government declared a public health emergency and required non-essential businesses to shut down, while requiring the safe operation of a broad range of businesses designated as essential services. As of June 24th, B.C. moved into Phase 3 of the government’s Restart Plan, which allows a broader range of businesses to reopen, including hotels and resorts, and select entertainment venues, providing that they develop the provincially mandated COVID-19 Safe Plans. Phase 4 will allow reopening of mass gatherings such as conventions and concerts, as well as international tourism, and is conditional on the introduction of widespread vaccination and community immunity. The Provincial Health Officer implemented an order on province-wide restrictions, which will be in effect from November 19 to December 7 which suspends all events and social gatherings , with an exception to weddings, funerals, baptisms, support group meetings and business meetings. All workplaces are encouraged to make every effort to provide work from home options, and it is expected that travel to British Columbia be for essential trips only.

Canadian Urban Institute