More businesses in decline than growing: Survey
A recent survey by Community Futures West Yellowhead found nearly a quarter of businesses in Jasper were in a state of decline in 2016 compared to 13 per cent that were growing.
The new information is based on interviews with 113 local businesses conducted in 2014 and again in 2016.
According to the survey, 58 per cent of respondents reported that they were maintaining their business while 24 per cent reported they were in a state of decline. Five per cent said they were considering closing at the time of the interviews.
“Those that said they were declining or considering closing we found in the retail sector,” Nancy Robbins, manager for Community Futures West Yellowhead, said on May 9.
“We asked them in 2014 to make a prediction over what was going to happen over the next two years and what we saw in the retail sector was that they were predicting that their number of customers would grow and therefore their sales revenue would grow, but what we discovered in 2016 was that was not the case.”
In 2016 businesses reported customer numbers were up by 36 per cent compared to 2014, but sales were only marginally better.
In fact, 44 per cent of respondents said profits stayed the same despite sales revenue increasing by 41 per cent since 2014, suggesting the cost to do business has also increased.
A lot of businesses have blamed their rising costs on the increase in minimum wage, however in 2014 the study found the local average wage for non-managerial positions in Jasper was $12.50, significantly higher than the minimum wage at the time, which was $10.20 per hour.
In October the government increased minimum wage to $12.20 per hour with a plan to increase the minimum wage to $15 per hour by 2018.
“We saw record numbers of visitors come to our community in the past two years, but what has been particularly noted is the spending pattern of those visitors,” said Robbins.
In the past, she said, visitors were more likely to spend money in Jasper, whereas in 2016 a lot of customers were window shopping or shopping online.
“The visitors are coming in, but they’re not spending the money like they used to.”
Rusty Noble, president of the Jasper Park Chamber of Commerce, opted to look at the study in a more positive light.
“With the current state of the economy in Alberta I’m actually a little bit encouraged with what I am looking at here and not in a way most people would think,” said Noble.
“When you look at Edmonton and Calgary and other cities across the province, to have 71 per cent of your businesses maintaining or growing their business in this market I believe is quite positive.”
He acknowledged there are certain segments of the business community that are hurting, particularly the retail sector.
“Retail is seeing some real challenges and they’re seeing challenges that are faced by everybody,” Noble said, pointing to the increase in minimum wage, property taxes and the provincial carbon levy.
“All these things are adding to the challenges businesses are facing.”
The report also touched on several other topics including bylaws and regulations, housing policies, commercial space and relationships between different levels of government and the Chamber.
According to the report, businesses described Jasper’s commercial space as “debilitating” because of the cost to rent space.
Robbins said the recent movement of businesses within the downtown core and the number of empty storefronts reflects the challenging business environment facing the retail sector.
“Given what’s happening in the retail sector, they’re trying to make creative changes in their business to try to change their business model to make it work,” said Robbins.
“Empty storefronts are quite a bit of concern and I’ve lived here for quite a long time and I don’t recall empty storefronts being an issue in Jasper so I think we need to start asking why we have those empty storefronts and do a little bit more work as to why people aren’t renting the commercial space downtown.”
Jasper’s perennial housing shortage was also a major concern for businesses.
“I think from the business community any progress is good progress, however within Jasper it doesn’t move fast enough,” said Noble. “It will continue to be a challenge until Parks Canada and the municipality really get together and are forced into some sort of viable solution moving forward.”
In February 2016, the Jasper Community Housing Corporation (JCHC) announced plans to build two new developments to provide staff housing for businesses as well as market value units for seniors. The municipality said it would provide an update on those plans in May.
While the picture is mixed for a lot of businesses in town, Noble urged business owners to not get discouraged.
“Business levels fluctuate based on external factors we can’t always control. What we can control is our business and how we operate our business and what we do. The state of consumer behaviour is changing and I would encourage people to follow those trends and understand what those trends are and how that impacts their business,” said Noble.
“You can always point fingers at other people, but really what it comes down to is you’re an entrepreneur, take that entrepreneurial spirit and make your business work for you.”