Data show COVID-19 pandemic’s mixed impact on Vancouver businesses

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The pandemic has had a mixed impact on business openings and closings in Vancouver, with data showing that there were fewer retail stores and restaurants than before COVID-19, but that more offices had opened last year.

For one city councillor, the drop in the numbers of shops and restaurants is an ominous sign and she fears worse to come with businesses being hit with yet more restrictions in the current Omicron wave.

“I think it will get worse,” said Councillor Sarah Kirby-Yung. “It’s going to be tough for everyone to keep going. There was a real hit this time.”

But Mayor Kennedy Stewart sees the numbers quite differently – as a testament to the economic resilience in Vancouver compared with other cities such as Toronto or Montreal.

“What it says to me is that, despite the terrible challenges businesses have had, we’re almost holding our own,” said the mayor, who noted that the number of retail operations had gone down by less than 5 per cent, with 3,355 still in business for 2021. “My suspicion is that there will be strong growth once the restrictions are lifted.”

The number of business licences that were issued or pending overall for Vancouver was 58,651 for 2021, compared with 58,851 in 2020, 62,415 in 2019 and 59,788 in 2018. Some other categories of businesses that got hit hard were those in the personal-care business: Beauty services went to 66 from 124; cosmetologists to 210 from 339. Short-term rental licences dropped to about 3,900 in 2021 from 6,200 in 2019, a peak year.

But many other categories stayed almost unchanged or increased slightly. Fifty clubs received licences in 2021, compared with 54 in 2018. The number of hotels stayed steady at between 115 and 120.

The mayor’s optimism is echoed by people in the commercial-leasing sector.

“The overall theme is pretty good for Vancouver,” said Martin Moriarty, the senior vice-president for investments at Marcus & Millichap, which specializes in leasing for Vancouver’s major retail strips. “I have been on global calls and there was never the panic here that there was in other cities.”

Downtowns worldwide have been “disaster zones,” he said. But Vancouver didn’t match that pattern.

A report on Vancouver-area retail from the brokerage Lee & Associates, done in the fall of 2021, also sounded a bullish note.

“Since Q3 of 2020, vacancy has continued to decrease, and rents have been steadily climbing,” said the third-quarter summary done by research co-ordinator Macyn Scholz.

“The implementation of a vaccine passport meant that indoor dining, concerts and events could come back, with consumers flooding back to these destinations in order to make up for lost time.”

Many shops and restaurants that closed were quickly occupied by new tenants, he said in the summary.

But the setback dealt by the explosion of a new wave of COVID-19 infections, dominated by the Omicron variant, has those in the small-business sector feeling more vulnerable than they were before Christmas.

“Our businesses are resilient, but there’s a little bit of fear and worry out there,” said Patricia Barnes, the executive director of the East Village business improvement association.

“A lot of retailers were saying that in the period before Christmas, things were pretty good. But with the restaurants, before there were even any restrictions, people were cancelling reservations.”

In the final days of 2021, more closings of long-standing businesses were announced: Bishop’s restaurant in Kitsilano, beloved nerd bar Storm Crow Alehouse on Broadway, Michael’s and Versace on Alberni Street.

Ms. Barnes and many others say that Vancouver’s businesses are threatened as much by other factors, though, as they are by the pandemic.

She said the rash of window-smashing, vandalism, shoplifting and graffiti that has hit businesses in her stretch of East Hastings, as well as several other commercial clusters elsewhere, is as big a setback as anything else.

“It’s a difficult environment.”

Ms. Kirby-Yung also said that the city’s own cumbersome permitting system has been a major factor in retail and restaurant operations struggling to open or to stay in business.

“We’re one of the biggest challenges in not enabling our businesses to be nimble,” she said.

The number of retail licences in Vancouver has been on a slow but steady decline for a decade. There were about 11 per cent fewer business licences issued in 2021 than in 2013. About three percentage points of that decline were in the past two pandemic years.

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