Queen Street East, The Beach - Toronto, ON
BLOCK REPORT ROUND #2: NOVEMBER 2020
This report was prepared during the months of October and November 2020 based on conversations with the Beach VIllage Business Improvement Area (BIA) 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.
Photo credit: The Beach Village BIA
Summary
The Beach neighbourhood is centred on Queen Street East, in the east end of Toronto. The average price of a home in the neighbourhood is $1.23 million. Residents are predominantly white, with 16% of residents identifying as a visible minority according to the 2016 census, compared to 51% of Torontonians more broadly.
The businesses on this block are mostly independently run (84%), with an average of one to three employees.
Five businesses on this block have closed permanently as a result of the pandemic, however, nine new businesses have opened or are in the process of opening.
The local community has been making a concerted effort to support the businesses on this block; 40% of businesses said they have been positively impacted by more customers from the local neighbourhood.
Summer on this block felt almost normal. While many businesses were struggling, others had revenues the same or higher than previous years. The patios created through City of Toronto’s CaféTO program brought a lot of vibrancy and foot traffic to the street and gave businesses more space to serve their customers.
Business Survey Highlights
We conducted a survey of local businesses on this block to better understand the impacts of COVID on businesses and the street. Here is what we learned:
30% of businesses said business was “booming” pre-COVID, 50% of businesses said business was going “ok”
50% of businesses said that lack of customers was their biggest challenge
40% of businesses said they have been positively impacted with more customers from the local neighbourhood
70% of businesses said that supply chain issues have affected their business to some degree
20% of businesses said they have increased revenues since COVID and 10% said revenues were about the same.
38% of businesses said that they would like to see governments and other main street advocates encourage shopping at local/independently owned Canadian businesses
“June to September was very busy as people were at home… October is much slower because of the 2nd wave. Winter will always be slower in the Beaches. We are unsure of the times ahead.” – Local business owner
The Beach During COVID-19
Key Impacts:
On this block, five businesses have closed since the pandemic began, including a hair salon, a pub, a health and fitness boutique, and David’s Tea. Several other businesses closed nearby. However, nine businesses have opened during the same time period, including a comic and collectibles store, a pub, a restaurant and a cannabis store. Several other businesses have opened in the surrounding neighbourhood.
Many businesses are experiencing lower revenues compared to pre-COVID; 30% of businesses reported operating with reduced revenues.
Despite lower revenues, 87% of the business are operating with the same number of employees as pre-COVID. This is likely because many of the businesses only had 1-3 employees to begin with.
Insurance premium hikes have created major issues for some of the local bars and restaurants. One of the live music venues reported that their premiums tripled when they renewed their insurance.
Few landlords on this block applied to the governments rent subsidy program (CECRA). There is a growing trend of larger companies owning properties in the neighbourhood and they tend to have less concern for the tenants or the neighbourhood, compared to local landlords.
Bright Spots:
Some of the businesses on this block are doing better then they were before COVID; 20% of businesses have increased revenues compared to this time last year and 10% said revenues were about the same. For example Buds Coffee Shop and Cobs Bakery have been busier than ever throughout the summer.
Businesses reported that the local community has been making a concerted effort to shop local. Residents have also been spending more time in their own neighbourhood; rather than traveling on weekends or in the summer they are staying and enjoying the local parks and the beach. According to the business survey, 40% of businesses have been positively impacted by more customers from the local neighbourhood.
Retailers on this block are continuing to be flexible in the way they meet their customers, including private shopping experiences, online auctions, delivery and curb-side pick-up; 23% of businesses said they are being positively affected by selling more online and 38% said they are doing more business through delivery applications.
6 businesses on this block participated in the CafeTO patio program, which brought vibrancy and pedestrian traffic to the street. Several businesses decorated the street-side fencing which helped to animate the streets.
What’s Next:
Fall and winter can be difficult months for the retail businesses on this block and many businesses rely on holiday shopping for a revenue boost. The businesses and the BIAs are hoping people really ‘double down’ on supporting local this holiday season.
Many businesses developed plans for the second wave/increased restrictions (free local delivery, curbside pick-up, take-out), however, there is still a great deal of anxiety and fear about what the next few months will hold in terms of business closures. Many businesses don’t have much in their reserves because of lower summer revenues.
Large real estate investment companies are playing an increasingly dominant role on this block. Many are holding onto properties and seem to be holding out to sell to developers.
Block Story: Carl Pratt, Founder/Owner of Beaches Brewing Co.
Carl is a local to the Toronto Beach neighborhood. With a passion for entrepreneurship, Carl started Beaches Brewing Co. as a destination for craft beer and food.
During the initial lockdown period Carl closed down the business completely and laid off all his employees. Carl’s business was not initially eligible for the wage subsidy since he had not been open a full year and didn’t have sufficient revenues. However, his landlord did apply to the rent subsidy program which was a lifeline for his business.
As the restrictions lifted, Carl opened up a patio which sat a limited number of customers. He slowly started rehiring but still does a lot of the work himself. Though he felt July and August were survivable, it was ‘a shadow compared to what it could have been otherwise’.
As a business owner, Carl has had to make some hard decisions to keep his business afloat during the pandemic. In the last few months, he has had to make great compromises. He says that more than anything, people are fearful and that their consumer mindsets need to change to adapt to the continually evolving situation.
Rent remains the biggest issue and expense for Carl’s business so he is hopeful that the new rent subsidy program will be successful. Over the winter, Carl plans to put an emphasis on take-out and curb-side pick-up. He is not planning to purchase a patio heater; due to the difficulties finding them and the costs to maintain them. He hopes that people will dress warmly and embrace winter.
What Can Governments and Others Do?
Local and provincial governments have implemented a number of programs to help mitigate the costs of COVID-19 for businesses, such as through PPE grants, and deferring or waiving payments like property tax and utilities. Continuing to find ways to lessen the financial burden on main street businesses by offering grants and waiving or deferring fees can help them through the next phase of the pandemic; 38% of businesses said that they would like to see governments do this.
Businesses would like to see governments encourage shopping at local/independently owned Canadian businesses. BIAs/BIDs and local governments across Canada are developing creative programs, policies and campaigns to this effect. There can also be a role for provincial governments, such through initiatives like Le Panier Blue created by the government of Quebec.
High property tax has been a major issue in The Beach for many years. Local and provincial governments can develop policies that create a more competitive tax environment for small businesses; 31% of businesses said that over the long-term they would like to see governments focus on this.
The high cost of rent is a major issue for the businesses on this block. The increasing trend of large investment firms owning property in the Beach is also an issue. There is an opportunity to explore ways to create more secure tenancy for business owners such as through community-based financing and other tools.
About This Block
The Beach is a family-oriented neighbourhood in the east end of Toronto. It is anchored by Woodbine beach, one of the most popular public beaches in Toronto. The Queen streetcar provides an important entry point for visitors. The side streets are mostly lined with semi-detached and large-scale Victorian, Edwardian and modern homes. It has a higher average household income compared to other neighbourhods in the City ($92,109 vs. $65,946). The average price of a home in the neighbourhood is $1.23 million. Residents are predominantly white, with 16% of residents identifying as a visible minority according to the 2016 census, compared to 51% of Torontonians more broadly.
Queen Street East is the main commercial street, which includes both chain and independent businesses. There are some very successful small businesses like Ed’s Real Scoop and Toronto’s first vegan bakery, Tori’s Bakeshop. Commercial vacancy is a critical issue on Queen Street East. Pre-COVID, around 12 to 13 percent of the storefronts within the BIA area were vacant, which is higher than most other neighbourhoods in the city. The city’s high commercial property tax rate is one of the contributing factors.
This block has a variety of small and independent businesses, including Buds Coffee, restaurants like Gull & Firkin, apparel stores, nail salons, yoga studios, bookshops, and more. There are several minority-owned businesses. A local bar and restaurant called the Stone Lion has a particularly popular patio that fills up during the summer months. There is also a Shoppers Drug Mart, Starbucks, Popeye’s, and an LCBO (the Provincial-run liquor store). Despite the high vacancy rate pre-COVID, most of the businesses on this block were doing well.
A key focus of the BIA has been to encourage people visiting the beach to stay and spend their time (and dollars) in the local neighbourhood. The anchor park, Kew Gardens, and summer events like the Jazz festival were key to bringing people to the neighbourhood and foot traffic to the streets.
Provincial COVID Context
With more than 106,000 COVID-19 cases, Ontario has the second highest case count among Canadian provinces after Quebec. On March 17, 2020, the Ontario government implemented emergency orders, which included the closure of non-essential workplaces. From May through August, the province then implemented a three-stage plan to lift restrictions. In June various regions started moving into Stage 2, which allowed businesses that were deemed non-essential to reopen with proper health and safety protocols in place, and then in July various regions moved into Stage 3 which allowed all businesses and public spaces to reopen. In November, the Ontario government introduced a new colour coded system spanning five categories: green (standard measures), yellow (strengthened measures), orange (intermediate measures), red (stringent measures), and grey (lockdown- maximum measures). As of November 23, Toronto entered the grey lockdown category, which limits non-essential retail to curbside pick up only and restaurants to take-out only, while recreational facilities and personal care services are closed.