Supply chain woes threaten COVID-19 recovery for small businesses

The global supply chain crisis, driven by a scarcity of materials, overseas shipping delays and labour shortages, has not hit all businesses equally.

Take Canadian Tire, for example, which last week said confidently that it shouldn’t have any issues stocking its shelves over the holidays.

The company’s CEO explained it has been able to lean on its vast storage capacity across the country to order goods well in advance and chartered its own ship to make sure its winter goods arrived in plenty of time for the busiest shopping season of the year.

Your typical mom-and-pop shop down the road, however, does not have access to Canadian Tire’s network and deep pockets, let alone that of giants like Amazon or Walmart.

“It’s impacting small business a lot because if we don’t have a certain product, people are going to the big business right away, because they can get their product probably easier through them,” says Jill Rochon, owner of Jill and the Beanstalk, a baby supplies and toy store in Toronto.

“It’s really affecting us.”

As large retailers rely on impressive scale to keep shelves stocked through the crucial holiday shopping season, Canadian small businesses have been forced to get creative to survive the global supply chain crisis.

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More than two-thirds of Canadian small businesses are reporting an impact from the supply chain crisis, according to Dan Kelly, CEO of the Canadian Federation of Independent Business (CFIB).

Many smaller firms rely on the snared international supply chains for products made overseas as well as to get component parts to their manufacturers.

“When you add that then to inflationary pressures that many businesses are facing and the rising cost of business more generally, this is creating some real crunch,” Kelly says.

Supply chain issues have loomed for months at many mom-and-pop shops, with multiple stores telling Global News their suppliers were warning them in the summer months that holiday orders would face delays come the fall.

“All retailers across Canada have been literally sitting on pins and needles, waiting since August. When are my shipments going to come? How much are they going to cost?” says Nikki van Duyvendyk of the Saskatoon-based home and garden store Dutch Growers.

“We thought we knew how everything rolled … and now it’s a whole nother ball game.”

The timing couldn’t be worse for many retailers who have narrowly survived a year and a half of rolling lockdowns and capacity limits tied to the COVID-19 pandemic.

With some businesses typically relying on the final two months of the year to make up to half of their annual sales, Kelly says how firms navigate these supply chain snags could mean the difference in making it through to 2022.

“Businesses are hanging on by their fingernails. And for retailers, as we approach the holiday season, this is make it or break it,” he says.

Rochon says one of the hardest things about keeping toys and other goods on the shelves is the randomness of what’s coming through and what’s delayed; toy barns and trains, certain paints and temporary tattoos are just some of the niche items she hasn’t been able to get stocked for the holidays.

“I called the distributor, she said there is a Pokémon card shortage around the world right now,” Rochon says.

The shop owner says she’s spent four times as long this year scouring supplier websites to be ready to place orders when stock becomes available. While she’s confident there will be toys on the shelves come December, Rochon says parents should set realistic expectations for their kids’ wish lists this year.

“They’re going to have to teach their kids … that Santa maybe couldn’t make it this year. Whatever you’re celebrating, you just have to be more lenient.”

Knowing back in the summer that she’d have to get creative to get products on the shelves with the shipping delays on the horizon, Ziggy’s at Home owner Julie Fass said she found upsides getting outside her Toronto-based shop’s traditional supply chain.

“I’ve always wanted to get rid of the cello we use for our gift wrapping, and since I can’t get it this year, I’m changing up my gift wrapping and it’s more environmentally friendly. In some ways it’s definitely been harder and in some ways it’s definitely benefited us,” she says.

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Kelly says Fass isn’t alone in finding creative workarounds to the supply chain snags — some independent businesses have been able to outmaneuver their larger counterparts by finding domestic suppliers not constrained by shipping backlogs.

“A small firm is more easily able to pivot and make changes on a dime. If you’re a big, big company, yes, you may have clout, but if your goods are stuck on a pallet on a ship, there’s not an awful lot you’re going to be able to do to improve that,” he says.

Business could boom, then, for local manufacturers and makers of artisan goods in the months ahead as retailers look for suppliers who are just a short drive away, Kelly says.

Van Duyvendyk says the difficulty getting orders from overseas has dovetailed nicely with the buy-local mindset. She says a focus on getting products from local suppliers has been a “saving grace” for Dutch Growers, and that it’s also resonated with her customers.

“Luckily, before the pandemic even started, we’ve been really trying to embrace local brands. And to be honest, the public is really wanting that, they’re wanting to go support local,” she says.

In the same way smaller retailers have relied on buy-local to keep their shelves stocked, the same trend could bring the extra support independent businesses are in dire need of this year.

Fass says the support of her Toronto neighbourhood has been a constant throughout the pandemic and now into the supply chain crisis.

“We need to be able to turn on our toes, for all aspects. Whether it’s product coming in, whether it’s packaging, the number of people, staff.… This really has been the biggest challenge and I’m so grateful this community and the neighbourhood have really rallied around small business,” she says.

—with files from Anne Gaviola and Gabriela Panza-Beltrandi

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