April 20, 2020
The economic news has been bleak for some time, but the rebound in the stock market over the past three weeks has masked the ongoing damage on main street. One way to examine the effects of the economic damage on main street is to take a walk down main street.
Toronto has a wide variety of street level shopping. Today I went for two separate walks to see how many storefronts were for lease. My first path was along Queen Street West which is a bustling, trendy shopping district in Toronto. Between University Avenue and Bathurst Avenue, a stretch of about 1.5 km, I took photos of every storefront that had a for lease sign on the front. The number of storefronts was 25. That is an incredible number. In my experience it is typically zero.
My route back was down Bathurst and along King Street West, where there were a further 10 stores with for lease signs.
A second walk was a little less depressing. Bloor Street West is a trendy area, with a lot of restaurants, a large student population and plenty of street traffic. I walked west between Spadina and Dufferin TTC Stations. In this case a walk of 2.8km. Here the news was a bit better with only nine shops with a for lease sign. There were about six others that were clearly out of business, but I only counted for lease signs.
Toronto’s retail vacancy rate in the second quarter of 2019 was about 1.9%; in Toronto’s downtown core it was likely zero. In the case of Queen Street, I walk that street about once a month, and I have rarely seen an empty storefront. This is a significant change.
Canada has been under a relatively strict social distancing regime since mid-March, but like most other countries, the serious decline in business activity has been on-going for about two months, and the carnage on the streets of Toronto has become noticeable. Of course this is not a comprehensive measure of the economic fallout of the pandemic, but it should be representative.
There is little doubt that the pain on main street will persist and likely get worse. Businesses all over the world are starting to show signs of the stress. Restaurants, movie theaters, shopping stores and the malls that house them, travel companies and the services that support them . . . they are all in very significant difficulty. Other industries from auto companies to fitness facilities, schools, day cares, farmers, oil and gas companies. . . they are all in significant difficulty and the trillions of dollars being offered by governments around the world will not be enough to return commerce to what it was. The money being offered to corporations would be much better delivered to individuals to help them decide what has value.