Retailers around B.C. are willing to pay more for inventory rather than spend their money on U.S. goods, according to survey results released this week by the Business Improvement Areas of B.C.
Amid the ongoing trade dispute with the U.S., the organization, which includes the Downtown Victoria Business Association, conducted a survey this month that showed 58% of small- and medium-sized businesses are already getting supplies from new sources.
It found about 84% of businesses are taking the action despite the fact it is likely to come with a higher price tag.
“These results show that business owners, just like consumers, are shifting their buying patterns in the Canadian interest,” said Jeremy Heighton, president of Business Improvement Areas of B.C. “What’s more, they are following their heart and exploring new sourcing alternatives, even if it means they will be taking a financial hit.”
The majority of businesses surveyed — 161 businesses from BIAs around B.C. provided feedback — said they were willing to negatively affect their profitability, increase prices for consumers and delay growth or expansion plans rather than buy American goods.
That mirrors consumer trends during the tariff war with the U.S., as consumers have shifted their buying patterns to “shop local” and “buy Canadian” campaigns.
The survey found the majority of small- and medium-sized businesses have a mix of supply partnerships, most of them B.C., Canadian and American.
About 12% of businesses said they are bound by contractual obligations that won’t allow them to establish alternative suppliers in the short term.
The Business Improvement Areas of B.C. said the situation highlights how Canada has become too dependent on its relationship with the U.S. and how vulnerable the province’s economy and businesses are to market volatility.
Jeff Bray, chief executive of the Downtown Victoria Business Association and former president of the provincial body, said the survey results are consistent with the experience for businesses in Victoria.
“Everybody’s very alive to the issue,” he said, noting in some cases, before businesses can switch to a new supplier, they must clear out inventory tied to an operating line of credit.
Bray said some downtown Victoria businesses are immune to the ongoing trade spat, as they don’t sell big-ticket items.
The bigger issue, he said, is Canadian consumers who are aggressively avoiding U.S. goods to send a message to Washington, which could hurt local retailers.
“We’re all kind of waiting to see if people can make the distinction between a locally owned business and what their inventory or their products might be.”
Bray said a head office in the U.S. may not notice a small Canadian outlet or franchise losing money and being forced to close, but the local economy will feel the effects if that business owner stops paying its employees, sponsoring local teams and events, collecting and remitting tax and buying local supplies because consumers stopped buying its U.S. products.
Bray said he’s hoping consumers understand the interconnectivity with the U.S. economy and don’t throw the baby out with the bathwater.
He said the city will have a better idea where it sits this fall after what looks to be a strong tourism season and a potential trade deal is brokered.
“I suspect that even if there is some new trade deal, the sentiment that this has drawn up is probably going to mean that businesses will continue to look for diverse supply chains and products.”
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