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:
https://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:
https://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:
https://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
https://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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