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Coming Out Of Covid Part 2: The economy learns to adjust

Coming Out of COVID is a five-part series where GuelphToday looks at various issues as we begin to emerging from the pandemic

Adapting to new circumstances. Collaborating with others to find solutions to shared challenges. 

By many accounts, that’s what has helped many Guelph businesses survive, and in some cases thrive, during this health, social and economic crisis. And they’re what will lead us to greener pastures as we emerge from this shared situation.

“For every action, there is an equal and opposite reaction – it holds true in business,” said John Regan, the city’s general manager of business, development and enterprise services. “This created a great deal of opportunity for businesses and new entrepreneurs to come forward.”

In order to combat the massive economic impact of COVID-19 and keep the community employed, many businesses have increased their online presence and adapted their offerings to meet a new demand.

There’s no shortage of examples of this, from shifting to online sales and curbside pickup to retooled operations and more, along with increased interest from people looking to start their own business.

Those changes didn’t manifest themselves. They’re brought on in response to the harsh realities of job losses, business closures and the impact of health regulations aimed at stopping the spread of the virus. 

The latter includes limiting the number of in-person customers at any given time, enhanced cleaning and sanitation requirements, increased space for physical distancing and in some cases the installation of barriers to force separation. 

Though those initiatives can have a direct impact on businesses’ ability to turn a profit, they’re necessary, said  Shakiba Shayani, president of the Guelph Chamber of Commerce. 

“Public health and economic recovery is of utmost priority and they actually go hand-in-hand,” she said. “We will only get through this if we tackle the public health issue that we’re facing. Although it’s not ideal, we still very much look to our healthcare experts to guide us through this part of the pandemic.

“News of the vaccine and the vaccine roll-out is probably turning confidence around, and that’s great, but I think we still have a little while to go.”

Statistics Canada says that between February and June 9,900 residents in the Guelph area (including Guelph/Eramosa and Puslinch), lost their job either temporarily or permanently.

Sales and service jobs accounted for more than half that number.

That brought the local unemployment rate to 14.9 per cent in June, nearly double the previous record-high of 7.6 per cent in February of 2010. 

By November, Statistics Canada shows the area had gained back many jobs, with an unemployment rate of seven per cent. That includes businesses recalling laid-off workers, in addition to expansions and new entrepreneurial endeavours.

Guelph’s economy has remained “relatively stable” for many years, even during the downturn of 2008, said Christine Chapman, the city’s manager of economic development, pointing to the mix of private and public employers, along with a variety of sectors in the city as the reason. 

“Guelph hasn’t seen an economic shock in a very long time. I think that this woke everyone up a little bit to the fact that Guelph is just as vulnerable as any other community out there,” she said of the pandemic. 

No one saw the pandemic coming. At least not long before it reared its head globally. And the economic impact is unprecedented. 

It’s certainly not something Dana McQuatt and her brother, John, had in mind when they opened Infamous Eatery in the Grange Road plaza at Victoria Road late last year. They anticipated benefiting from customers attracted to established neighbouring businesses, as well as the patronage of students from nearby schools – especially St. James Catholic High School.

The pandemic prevented both, to any significant measure.

“We’re surviving, but because of some of these things, we’re just stuck at the starting gate,” McQuatt said, noting there was a school strike immediately prior to COVID-19 coming. “It’s been really difficult to figure out who we are as an identity, with influence from the public, because we just don’t really get much.”

The restaurant was already set up for takeout orders, which has helped greatly. It wouldn’t have made it through without the uptick in food delivery apps, but that’s a double-edged sword, said McQuatt. They bring customers but take a cut of up to 30 per cent.

With 20 employees when the restaurant opened, McQuatt acknowledges it was probably overstaffed, even in “normal” times. But when a state of emergency was declared and in-restaurant dinning was shut down for two months, most of those jobs were shed.

At one point, the only ones working there were McQuatt and a manager, but now there’s six of them.

McQuatt is extremely thankful for the loyal customer base they’ve established, as well as the cooperation of their landlord and suppliers to reduce costs wherever possible. 

Since opening, Infamous Eatery has seen a number of changes – to its menu, the physical realities of pandemic life, scaling-up of takeout orders, and something McQuatt didn’t imagine before all this happened, a demand for catering (office lunches mostly, at this point).

“I really didn’t foresee that being a thing,” she said, noting it’s difficult to promote because she doesn’t want to be seen as encouraging large gatherings. 

Infamous Eatery is far from alone when it comes to finding new or altered revenue streams. 

“Some of those changes have increased sales in a way that is actually more streamlined and effective for their bottom line,” said Shayani, with a particular focus on the adoption of technology. “I suspect that will continue. … It’s made people less risk-adverse to trying new ways of doing business, which is a really good thing.”

Other examples abound in Guelph, like Dixon’s Distilled Spirits, which was one of the first around to start pumping out sanitizer when demand went through the roof and generally available supplies evaporated. 

“We just wanted to help,” owner JD Dixon said, explaining they were getting calls from hospitals, local and afar, as well as doctors’ offices, businesses and the general public. “It was crazy.”

So they reached out to the University of Guelph to come up with a sanitizer formula that meets the World Health Organization guidelines and successfully applied to Health Canada for temporary approval to produce it. 

They hired new staff and invested in equipment.

At the same time as the sanitizer side of things took off, spirits sales soared . Dixon’s went ahead with various alcohol projects planned for the year, including a blueberry gin which has proven extremely popular.

“I don’t even know what year it is this year,” Dixon chuckled, commenting on how busy things have been.

Though demand for sanitizer has died down, the distillery continues to supply a number of hospitals and various operations, as well as public sales. It remains “a big piece” of the business and Dixon's is in the process of applying to become a permanent producer.

Canadian companies are quite capable of meeting the country’s sanitizer needs, Dixon said, adding it disheartens him to hear of the dependence on foreign companies.

“We can do it,” he said. “I see a trend that people are starting to think a little bit like that. Let’s keep some of our people working.”

The de-globalization movement isn’t new, but it’s picking up pace in the face of the pandemic, Regan adds.

“We’re more conscious now about our food security, we’re conscious now about what we’re buying, where it’s coming from and what’s in it, more so than ever,” he said.

“This trend back to homemade is just going to get escalated very, very quickly and it has already happened. I think that’s where Guelph really is going to excel. Guelph is going to be the gazelle in Ontario as we come out of this pandemic.”

Similarly, shop local sentiment is strong in the community, and growing, agree Shayani and Chapman.

“We take advantage of our small businesses just always being there. Especially during the holiday season, it’s been so great to see people being able to support local,” said Chapman, adding many have reported seeing new customers come through the door. “Hopefully some of that shop local mentality continues to move forward.”

We’ve learned a lot about ourselves during the pandemic, personally and professionally, about different ways to successfully do business in challenging times.

“If no lessons were learned through 2020, what a waste,” Chapman said with a laugh. “We learned an awful lot and I certainly think we’re going to be better for it.”

The series:

Monday, Part 1: 'I need the community willing to be vaccinated'

Tuesday, Part 2: The economy learns to adjust

Wednesday, Part 3: Rural issues, rural response

Thursday, Part 4: From stunned compliance to hope

Friday, Part 5: Hopefully a gentler, kinder place