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THE BUSINESS RESEARCHER NEWSLETTER ARCHIVES

March 13, 2001 Volume 4 Number 3

 CONTENTS

* Introduction - Editor's Comments

* What's New at www.gdsourcing.ca

* Statistics Canada releases

* Researching a Retail Business

* Small Business Stats Facts

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INTRODUCTION - EDITOR'S COMMENTS

 

Hello,

Welcome to this issue of the BR Newsletter.

February was a very busy month all round. You will notice below that there were quite a few releases from Statistics Canada. My in-box of "things to read" has become a bottomless pit!

Furthermore we were swamped last month with a sudden surge in HPS profile requests. It took us a few weeks but we have finally managed to get back on track with our turn around times. If you are thinking of ordering an HPS Profile now is the time to do it before another flood occurs.

As I mentioned in the last issue the Toronto Business Development Centre has released its January to June seminar schedule and I am booked to speak on two more occasions on Marketing Research & Analysis. The dates are April 3rd and June 5th. Both dates are Tuesday nights at 6:30 to 8:30. Free parking. Contact the TBDC for more information 416-345-9437.

Thank you for your subscription.

I hope you find this issue helpful.

John White

Editor, BRN

 

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WHAT'S NEW AT www.gdsourcing.ca - USED CARS, COLLISION SHOPS & THE SYMPHONY

The following web sites were added to the GDSourcing index over the last three weeks. GDSourcing is a reference point for free Canadian statistics on-line.

 

AUTOMOTIVE INDUSTRIES ASSOCIATION OF CANADA

http://www.aiacanada.com/

GDSourcing Site Summary: http://www.gdsourcing.ca/works/Automotive.htm

- Prep for the Future: issues and challenges facing the Canadian collision repair industry Fall 2000

Includes industry profile, workforce demographics, training, industry's image etc.

 

BUSINESS FOR THE ARTS IN CANADA

http://www.businessforarts.org

GDSourcing Site Summary: http://www.gdsourcing.ca/works/Busforarts.htm

- CBAC Annual Survey of Performing Arts Organizations 1997-1998

Executive Summary examines the financial state of performing arts organizations and art galleries and museums.

 

USED CAR DEALERS ASSOCIATION OF ONTARIO

http://www.ucda.org/

GDSourcing Site Summary: http://www.gdsourcing.ca/works/Usedcars.htm

- Used Vehicle Market in Canada Study Dec 2000

Includes size of market and channel shares, breakdown of dealership revenue, dealership size, used car financing, regional patterns

- 1996 Curbsider Study

Study took place in Greater Toronto Area. A curbsider is defined as one who is in the business of offering vehicles to the public for the primary purpose of making a profit, but behaves as if he or she is selling their own personal vehicle.

 

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STATISTICS CANADA RELEASES

The following statistics were release by Statistics Canada over the last four weeks. We have listed those releases we feel are of the most interest to Canadian entrepreneurs.

Very few of these statistics are available on-line. The URL listed is a direct link to the press release associated with the data. It provides contact and ordering information.

 

AGRICULTURE

A geographical profile of manure production - 1996

http://www.statcan.ca/Daily/English/010222/d010222e.htm

 

Farm cash receipts 2000

http://www.statcan.ca/Daily/English/010222/d010222c.htm

 

Fruit and vegetable production 1999 & 2000

http://www.statcan.ca/Daily/English/010216/d010216b.htm

 

Housing conditions in predominantly rural regions - 1996

http://www.statcan.ca/Daily/English/010223/b010223a.htm

 

Measuring economic well-being of rural Canadians using income indicators

http://www.statcan.ca/Daily/English/010308/b010308a.htm

 

 

BUSINESS & SCIENTIFIC SERVICES

Accounting and bookkeeping services - 1998

http://www.statcan.ca/Daily/English/010212/d010212f.htm

 

Advertising and related services - 1998 and revised 1997

http://www.statcan.ca/Daily/English/010223/d010223f.htm

 

Architectural services 1998

http://www.statcan.ca/Daily/English/010214/d010214f.htm

 

Biotechnology Use and Development Survey - 1999

http://www.statcan.ca/Daily/English/010212/d010212b.htm

 

Employment services - 1998

http://www.statcan.ca/Daily/English/010215/d010215e.htm

 

Specialized design services - 1998

http://www.statcan.ca/Daily/English/010223/d010223e.htm

 

Survey of Usage by Businesses of the Social Insurance Number - 2000

http://www.statcan.ca/Daily/English/010215/d010215d.htm

 

Surveying and mapping services - 1998

http://www.statcan.ca/Daily/English/010227/d010227g.htm

 

 

COMPUTER SERVICES

Workplace and Employee Survey - 1999

http://www.statcan.ca/Daily/English/010219/d010219b.htm

 

 

CULTURE & ENTERTAINMENT

Performing arts - 1998

http://www.statcan.ca/Daily/English/010306/d010306c.htm

 

 

ECONOMIC INDICATORS

Income trends in Canada 1980-1998

http://www.statcan.ca/Daily/English/010221/b010221a.htm

 

Labour force historical review on CD-ROM

http://www.statcan.ca/Daily/English/010307/b010307a.htm

 

National Economic and Financial Accounts Year 2000 and fourth quarter 2000

http://www.statcan.ca/Daily/English/010228/d010228a.htm

 

Productivity growth in Canada 1961-1999

http://www.statcan.ca/Daily/English/010214/d010214a.htm

 

Private and public investment (2001 intentions)

http://www.statcan.ca/Daily/English/010221/d010221b.htm

 

Quarterly financial statistics for enterprises Year 2000 and fourth quarter 2000 (preliminary)

http://www.statcan.ca/Daily/English/010227/d010227b.htm

 

 

ENERGY

Crude oil and natural gas Year 2000 and December 2000 (preliminary)

http://www.statcan.ca/Daily/English/010226/d010226c.htm

 

 

HEALTH SERVICES

Health reports 1998/99

http://www.statcan.ca/Daily/English/010223/d010223a.htm

 

Canadian Tobacco Use Monitoring Survey - February to June 2000

http://www.statcan.ca/Daily/English/010306/d010306a.htm

 

 

HOSPITALITY

Food services and drinking places - 1998

http://www.statcan.ca/Daily/English/010221/d010221f.htm

 

Travel arrangement services - 1998

http://www.statcan.ca/Daily/English/010213/d010213c.htm

 

 

MANUFACTURING

Monthly Survey of Manufacturing Year 2000 and December 2000

http://www.statcan.ca/Daily/English/010219/d010219a.htm

 

Manufacturing industries of Canada: national and provincial levels

http://www.statcan.ca/Daily/English/010226/d010226d.htm

 

 

PERSONAL SERVICES

Personal and laundry services 1998

http://www.statcan.ca/Daily/English/010212/d010212e.htm

 

 

RETAIL/WHOLESALE

Canadian international merchandise trade Year 2000 and December 2000

http://www.statcan.ca/Daily/English/010221/d010221a.htm

 

Monthly Survey of Large Retailers Year 2000 and December 2000 (preliminary)

http://www.statcan.ca/Daily/English/010302/d010302a.htm

 

New motor vehicle sales 2000

http://www.statcan.ca/Daily/English/010215/d010215b.htm

 

Retail trade Year 2000 (preliminary) and December 2000

http://www.statcan.ca/Daily/English/010222/d010222a.htm

 

Wholesale trade Year 2000 (preliminary) and December 2000

http://www.statcan.ca/Daily/English/010220/d010220a.htm

 

 

TRANSPORTATION

Financial statistics for railways - 1999

http://www.statcan.ca/Daily/English/010302/d010302d.htm

 

International travel account Year 2000 and fourth quarter 2000 (preliminary)

http://www.statcan.ca/Daily/English/010226/d010226a.htm

 

Shipping - 1998

http://www.statcan.ca/Daily/English/010308/d010308d.htm

 

Travel between Canada and other countries - 2000

http://www.statcan.ca/Daily/English/010216/d010216a.htm

 

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RESEARCHING A RETAIL BUSINESS

 

The retail sector accounts for 6.4% of all economic activity in Canada. It is made up of a vast variety of store types selling a wide range of products. When you are researching a retail business there are three segments you need to consider:

1. Your Industry

2. Your Product

3. Your Local Market

Overall industry data is relatively easy to source. The Statistics Canada web site has annual retail trade data by trade group

( http://www.statcan.ca/english/Pgdb/Economy/Communications/trade15.htm)

and by province (http://www.statcan.ca/english/Pgdb/Economy/Communications/trade15a.htm).

You can also look at the latest monthly figures in the Daily: http://www.statcan.ca/cgi-bin/DAILY/mdaily.cgi

Search the keywords "Retail trade (63-005" to get a list of all releases.

You will note that the industry detail of the monthly data is very limited. The figures are aggregated into trade groups. From our experience we have found that many new entrepreneurs fall into the "other retail" category. Do not dismiss this data as irrelevant or too broad. It is important to understand general retail trends. They provide you with insight into the economic climate your store will operate in and help you to estimate forward more specific industry data.

You can find retail sales forecasts from the economic departments of Canadian banks. For example see the Bank of Montreal: Prospects for Canada's Industries to 2005  ( http://www.bmo.com/economic/regular/sector.html) This data will give you an idea of the outlook expected for the sector overall and will help you to make your own forecasts.

You should also look at the National Retail Bulletin at the JC Williams Group web site: http://www.jcwg.com/downloads.htm

It will provide you with some of the Statistics Canada data listed above as well as forecasts and consumer confidence levels. At the above address they also have a number of other reports on retailing trends that you can look at.

The Kubas Consulting website also has some retail information of interest namely: Canadian Retail Sales Statistics by Kind of Business 1990-2000, Canadian Retail Sales Statistics by Province and Major Market 1990 - 2000. Both reports are located at the following address: http://www.kubas.com/rpa/index.html

Once you have a basic overview of the sector it is time to focus in on your particular industry. The Statistics Canada annual publication Retailing in Canada (63-236) provides total operating revenues by specific (4 digit) Standard Industry Classification (SIC) codes. The trade off for the greater detail however is the lag time of the data: 1998 figures were released in 2001. Look at five years of data to get an idea of how your industry has grown. This combined with more general retail data can help you to assess how it has faired since 1998

The Statistics Canada retail survey is currently undergoing some improvements which will change the SIC industry coding to the new North American Industry Classification System and also provide more in-depth data. For more information on how the survey will change and to offer your comments see: http://www.statcan.ca/english/IPS/Data/63F0022XIE.htm

Many new entrepreneurs miss vital information because they dismiss publications before they even consult them. A good example is the Statistics Canada publication "Retail Chain & Department Stores" (cat#63-210). Some researchers do not bother to look at this source because they figure it does not apply to them since they are not opening a chain or department store.

What they fail to realize is that when you are planning on selling a particular product you need to know how that particular retail sector is performing among your chief competitors. Keep in mind that according to the Canadian Franchising Association nearly 50 cents of every retail dollar is spent at a franchise. And yet franchises represent only 5% of all Canadian businesses! They are not to be taken lightly.

Beyond Statistics Canada publications, there are a number of private sources that also cover retail chain data. One of particular note is the Monday Report on Retailers. This is a six page weekly newsletter, which identifies the expansion plans of Canadian retail chains.

What is particularly informative about this source is that it tells you what sort of location a particular type of retail operation is looking for, whether it be a free standing street front, a strip mall with a beer store, a shopping mall etc. It also tells you the anticipated store size in square feet along with other features. Finally it describes the overall expansion strategy of individual retail chains.

You can use this information for benchmarks and in forecasting. Is a major retail chain going to be locating in your market next month? Did you under estimate your store size? Over estimate? Do you need to rethink your location? This type of information is vital when you are first becoming acquainted with your market and industry.

Business directories can also be insightful. They help you to understand how retailers already in business are performing. A selection of good retail directories includes:

Canadian Business Information (includes sales and employees sizes with full addresses)

Directory of Retail Chains in Canada (includes advertising techniques, ad budget etc)

Canadian Directory of Shopping Malls (includes individual mall traffic, store type breakdowns etc.)

A commonly sought after statistic in the retail sector is sales per square foot. Unfortunately Statistics Canada's annual retail survey does not cover this particular piece of information.

You can however access data on the annual average and median sales per square foot (and metre for that matter) for retail chains in Canada. The annual publication Retail Chains and Department Stores (cat#63-210) provides data on 35 industry groupings.

This data is helpful but the categories are broad and suppression is frequent. If there are not enough chains within a particular sector Statistics Canada will not publish the data in order to protect confidentiality. In 1997 data was suppressed for Bakery Products stores, Wine stores, Children's Clothing stores, Fabric & Yarn stores, General Merchandise stores, Book and Stationary stores, Toy and Hobby Stores.

This leaves a lot of gaps in the data. The same industries are not suppressed every year so it is possible to look at previous issues to get at least an historic benchmark of sales per square foot.

The most current sales per square foot information available is from the Monthly Canadian Mall Sales Report published by the International Council of Shopping Centres. You can view the most current monthly and annual sales per square foot data (but not by square metre) on-line: http://www.icsc.org/srch/rsrch/canmallsales/current/index.html

As with the Statistics Canada data, these figures do not cover all types of stores. In this case however, instead of chains, the common variable is that the entire sample is based on stores located in Canadian malls.

The most detailed source we are aware of for sales per square foot is another American publication called the Dollars and Cents of Shopping Centers by the Urban Land Institute. This publication focuses on U.S. malls but it includes data on Canadian shopping centres as well. It covers 57 store types located in Canadian malls.

This source also provides data on:

- median store size

- rate of percentage rent

- total rent per square foot

- common area charges per square foot

- property taxes per square foot

- insurance per square foot

- total charges per square foot and as a percentage of sales

These three sources each provide data on sales per square foot. Each source has its advantages and disadvantages. We recommend that, if at all possible, you consult all three. Use this information to benchmark performance whether as a benchmark for your initial cash flow projections or as a barometer of your current store's performance.

When researching your industry do not forget to consult the Small Business Profiles available at the Industry Canada web site: http://strategis.ic.gc.ca/SSG/mi06756e.html

They provide detailed expenditure benchmarks by specific industry and province. The data was released in February 2000 and covers 1997. Do not be put off by the age of the data. The detail provided makes it well worth consulting. You can always use it as a conversation starter when you speak to other entrepreneurs in your industry. "What do you think of these numbers?"

You will find that most of the sources described above will not cover your particular retail operation. This is due to the fact that in order for industry and market statistics to be accurate (i.e. have a large enough sample size) businesses and commodities must be grouped together.

This does not mean that specific information related to your particular business does not exist. What it does mean is that you have to dig for it.

Now it is time to turn to media releases and industry publications. At the top of every retail researchers list should be the magazine Canadian Retailer. This industry publication contains general retail articles as well as specific studies.

There are also other Canadian industry publications which cover specific retail areas. For example: Canadian Grocer, Hardware Merchandising, and Channel Business (Formerly: Canadian Computer Reseller.)

We recommend you consult the Canadian Almanac and Directory to find out what periodicals exist that are related to your particular type of store. Use this reference book to also find related Industry Associations. Consult all magazines and organizations that are appropriate. Leave no stone unturned!

Another excellent source that many new researchers neglect is Marketing Magazine. This is the Canadian advertising industry's weekly periodical. Many of its articles provide data on market size or share for specific products and product groupings. They also analyze the marketing strategies of various key players in retailing. You can conduct a keyword search on-line at their web site: http://www.marketingmag.ca/ Unfortunately to view the articles full text you are required to pay an access fee or go to your local reference library to view a copy.

Do not forget to consult newspaper databases. Small business and entrepreneurship are popular topics in all Canadian daily newspapers. Oftentimes successful retail businesses are profiled. These profiles include market descriptions, as well as business opportunities and challenges.

Once you have examined your industry, it is time to look at information on specific commodity groupings. The Statistics Canada Retail Commodity survey provides quarterly data on approximately 100 commodities. It is released usually only one to two quarters after data collection. The most current data available right now is 3rdQ 2000.

What is especially helpful about this data is that it provides channel segmentation identifying retail sales by food stores, department stores and other types of retailers. This can give you an idea of the market share department stores hold for your commodity and whether it is growing. Data goes back to 1997.

The one draw back of this database is that some commodity groupings are rendered useless by data aggregation. Statistics Canada sometimes has to do this to protect confidentiality or data quality. The most glaring instance is the combining of computer hardware data with computer software figures. The only way to find out if your commodity is available is to contact Statistics Canada directly.

The data is provided on a custom retrieval basis only. The cost is $50.00 for one commodity and $25.00 for each additional commodity.

Statistics Canada also produces monthly retail commodity data for large retailers. Overall large retailers account for approximate 35% of total retail sales in Canada. This figure however varies widely by commodity. For example large retailers account for 68% of housewares but only 35% of sport and leisure goods. Approximately 100 commodity groupings are covered by this survey.

The data is generally two months out of date with December 2000 being the most current data available now. You can purchase this data on-line from the Statistics Canada CANSIM database:

http://www.statcan.ca/cgi-bin/Cansim/cansim?matrix=2395

The cost is $3.00 per time series. The advantage of this data is that you can observe seasonal trends of specific commodity groupings.

There are also a number of private firms and organizations that track individual product sales. Unfortunately, the cost to access this data is generally prohibitive for a new entrepreneur. If you are persistent in your research however, sometimes you get highlight data from a variety of sources. For example the ACNeilsen web site provides product growth rate data free of charge for grocery and drug store product items. http://www.acnielsen.ca/sect_studentcor/studtcor_en.htm

The data is slightly dated (currently 52 weeks ending May 20, 2000) but it is useful nonetheless.

Similarly the Canadian Sporting Goods Association provides monthly product growth rates for selected sporting items on it web site: http://www.csga.ca

Trade periodicals are another good source for product specific information such as growth rates, market share and market trends. Consult any related periodicals as well as general news media for information. Use a computer database to search on your product category, related product names, brand names, manufacturers, retail competitors etc.

Also look at the Consumer Price Index for your particular product grouping. It will provide you with the annual price increase for your particular product lines. You can access the information on the CANSIM database. http://www.statcan.ca/cgi-bin/Cansim/cansim?matrix=9957 Again the cost is only $3.00 per time series.

Statistics Canada has another useful retail resource called the Survey of Households Spending. It can provide you with the average annual household expenditure on 350 separate categories. At a national level the data is provided in the annual publication Spending Patterns in Canada (cat#62-202). Unfortunately the release of this publication is quite slow. The issue containing 1998 data was available in September 2000, yet in an unpublished format 1999 data was available January 2001.

The advantage of this data is that you can use it to estimate your local market value. By simply taking the average annual expenditure per household and multiplying it by the number of households in your market you can arrive at a basic market size estimate. The publication only provides detail at a national level but the unpublished tables provide provincial and metropolitan area geographies as well as data by income level and household type (e.g. husband-wife with kids).

It is quite expensive to purchase all the tables by detailed segmentation. GDSourcing is currently talking with Statistics Canada about providing detailed data by single category for a reasonable price. Stay tuned for the grand announcement in the next couple of weeks.

Local market information is vital to researching a retail business. Unfortunately 1996 Census data is getting a bit old for local demographics. Nevertheless, we still recommend that you collect Census data for your local area because it is the only free local level data that will provide you with at least baseline demographics.

Many major libraries provide access to Census Tract level data (urban neighborhoods of 3000 people) for large and small metropolitan areas across the country. This data can be particularly relevant for assessing the market conditions under which competitors failed. (See Yellow Pages advice below). You can also use it to determine the number of households in your neighborhood. This combined with the Survey of Household Spending data mentioned above will give you a rough estimate of your neighborhood market size.

2001 is a Census year but the results will not be available until 2003. In the mean time the best source for up-to-date municipal demographic information is the Financial Post publication FP Markets - Canadian Demographics. This publication provides socio-demographic details a well as income information, retail sales levels, labour force information etc. by specific Canadian city or town. All the data is estimated for 2001. You can find this publication in many major libraries as well as municipal economic development offices.

You will also want to locate all your local competitors. Start with the Yellow Pages. Many retail stores recognize the advantage of listing in this business directory and do so year after year. At many libraries you can also look at previous issues. Watch the trends in Yellow Pages advertisements. What features are stores highlighting. Is the number of stores growing or shrinking in your category?

If you notice that a store disappears from the Yellow Pages directory take down its name and address and investigate whether they have just stop advertising in the Yellow Pages or if they have actually gone out of business. You can find out if a business is still in operation by calling directory assistance and by looking at street indexed business directories (such as Criss-Cross or Bowers). You could even drive by the former location.

If they have gone out of business, what do you know about their local market? It is similar to your proposed market? What conditions may have been a factor in their failure? Did they actually go under or simply relocate to a better location?

Do not forget to physically look at your local market. What competitors can you identify on your own? Go to your potential store location, pose as a customer and ask people you come across on the street or in the mall where you can buy the product you are looking to sell. The response people give will provide you with the strongest local competitor.

Also talk to other non-competitor storeowners in your market. What can they tell you about their customers? Remember that for someone to shop at the store next door, they must walk right past your location. Is there a way you can access this ready market? Is it related to your own target market?

Finally, we always recommend that retailers research the manufacturing sector of their product lines. Understand the trends that are affecting your suppliers and how they might impact on your business. We provided a brief research strategy for the manufacturing sector in the previous issue of the BR Newsletter.

We can only cover so much in a short newsletter article but the above should give you a good basic strategy for finding free/low cost retail information about your industry and market.

For more research advice please see our research guide: Researching a Small Business in Canada  http://www.gdsourcing.ca

 

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SMALL BUSINESS STATS FACTS

Each Business Researcher Newsletter ends with a collection of five statistics that every entrepreneur should be aware of.

 

1. Are Canadian businesses involved in Internet B2B (business to business) transactions?

70% of Canadian businesses do not conduct Internet-based transactions. By the end of 2001 less than 3% of all business-to-business transactions will be conducted over the Internet

Source: Forrester Research Inc (2001)

 

2. Will B2B transactions among Canadian businesses grow?

Forrester's prediction is that by 2005, Canadian businesses will do $272-billion a year on the Web or 18% of all business-to-business transactions, of which about half will be spent at electronic marketplaces or aggregators like Bell-Zinc.ca.

Source: Forrester Research Inc (2001)

 

3. Are Canadian Businesses on-line?

Seventy per cent of SME (small & medium sized enterprises) companies polled have Web sites, and of those with sites seven out of 10 expect online revenues to rise in the next year

Source: Grant Thornton Ltd. (Sept 2000)

 

4. Do SOHO (Small Office Home Office) customers care if the computers they buy are well known brand names?

About 46 per cent said brands were not important, 31 per cent stated that their purchase depends primarily on price, and only 23 per cent said brand names were a primary concern when purchasing a computer.

Source: Canadian Office Products Association

 

5. How do most Canadian employees acquire their job-specific computing skills?

 45% of employees said they taught themselves using materials such as manuals, books and on-line tutorials.

44% stated that they received on-the-job training provided by co-workers, supervisors, resource people

23% cited employer-paid formal training.

7% reported learning their main computer application through college or university courses.

3% reported learning through other self-paid formal training.

Source: Statistics Canada 2001, Workplace and Employee Survey 1999

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Copyright 2000, 2001 GDSourcing - Research & Retrieval. All rights reserved.

You may circulate this newsletter freely as long as GDSourcing is clearly credited as the source. We encourage people to subscribe directly. There is no charge for this newsletter. A subscription and unsubscription form is available at http://www.gdsourcing.ca

 

 

 

 

URL: http://www.gdsourcing.ca/newsletter/newsletter4-3.htm
UPDATED: 05/11/03
1998-2003  GDSourcing - Research & Retrieval