Winnipeg Sun Believes Removal of Covenants Has No Effect on Competition

The December 13 editorial of the Winnipeg Sun believes competitive food prices only come from tax cuts. Removal of gas tax, business tax, property tax and income taxes. There is no mention of price fixing. Even if all those thing happened, the grocery and suppliers have fixed prices for bread and other items to that point that companies like Aldi believe the game is fixed here. And it is.

Large grocery stores have agreements to keep empty store faces or other competitors from setting up anywhere near them. Such actions with surely have U.S. authorities such as FBI kicking down the doors were it to happen in the States. The Sun says the Competition Bureau says the restrictive covenants don't restrict competition. In fact this is what the Canada's agency says:

A restriction on land that prevents a purchaser or owner of a commercial property from using the location to operate or lease to operators of certain types of businesses that compete with a previous owner.

The UK and New Zealand have restrictions on grocery stores from hoarding land and forbidding others from buying or using it to compete with them. This has NOTHING to do with taxes. Nothing. 

In Brandon a Sobeys was closed in 2017 and Sobeys has leased the property twice for five years terms to prevent competition. Above is a picture of that store. The Sun believes this is the result of overtaxing? Shindico said this was to prevent competition. Does the Sun believe this property should be restricted from sale or use? Do they even think this is a good idea? Why would Sobeys do this if they thought it didn't limit competition?

Antitrust is a real thing. It is private enterprise manipulating prices and competition. It happened with bread and it happens with property. The Sun says this doesn't exist? 

Prices are indeed affected by many things. But it just isn't government taxes. It is sometimes companies inflating prices, putting the thumb on the scales (or the packages) and they have been caught red handed. However, an empty storefront leased for years doesn't raise any eyebrows. It is the government's fault. 

Winnipeg Comeback 2022 Part 1

Above is Market Avenue, home of the Royal Manitoba Theatre Centre. 

In 2019 it seemed that Winnipeg and much of the province was on the cusp of a sustained economic growth period. Sure, weather was and always a possible factor but the diversified provincial economy seemed solid and several businesses were in expansion mode. Approvals for several buildings were made and construction was starting. And all this built on top of a stable economy already. Manitoba looked poised to enter its 150th birthday with a confidence not seen in some time.

It was not to be. By March of 2020, all of North America was shutdown with Covid 19. The brief celebratory time at the beginning of the year quickly turned to a sense of dread with the type of worldwide shutdown the likes the world have rarely seen. At the height of it, we saw our dystopic future of empty streets, office buildings and schools.

Above is Winnipeg City Hall. The city's 150th birthday comes soon.

Many families lost people as a result of Covid or because of what it has done to our health system. My family suffered horribly. My dad never recovered from Covid and we lost him in July. My mom hasn't walked since her release. And now she is in lockdown again. It is down to primary caregiver now. 

It wasn't a secret my parents had Covid. For too many the disease was something you only whispered at a family dinner like "cancer" as if that alone would make it go away. It was too easy for people to dismiss it by saying they had never heard of anyone getting it. It is awful in January of 2022 and it is spreading at a rate that is hitting everywhere.

Above is the empty space where city parkade and Public Safety Building once stood. Red River College downtown campus in background. The space could transform the area and further enhance Princess as well as King as a dynamic area of the Exchange and Chinatown.

But this isn't looking at how bad the last 18 months have been or how 2022 feels like a continuation of what has passed. This is about the comeback for Winnipeg and Manitoba in 2022. While there is no doubt that that many small businesses have taken it repeatedly on the chin, some developments and business start-ups continued through the pandemic. The tallest tower in the city has been under construction through the entire time and should be open to new residents soon.

Likewise, towers on on Assiniboine were finally completed for lease or purchase. The Medical Arts converted to residential, the former United Grain Growers on Main converted and industrial conversions to residential on Waterfront are in progress. It is easy to lose track of the projects whether they be on Princess, on Broadway or near the art gallery. And those are the ones just downtown. 

The above is Chinese Cultural Centre which now overlooks a piece of prime property where the parkade and Public Safety Building Stand.

Driving down Sterling Lyon by Seasons has been non-stop multi-unit construction on industrial land. Seasons of Tuxedo and surrounding area have seen a huge spike in commercial and residential building. Hotel construction took place even as the pandemic continued. And Kapyong is now cleared of all buildings and awaiting the next step. One thing it won't be is a big mall. There is no market for another. It will have some retail but will feature more residential, recreational and cultural buildings. It will likely have a hotel as well. 

For the entire pandemic there were either brand new or re-furbished grocery stores built. Two new Red River Co-Ops on Sterling Lyon and Pembina Highway. New Save on Foods on Pembina. Every Safeway re-done. And No Frills and Freshco conversions from other grocery stores. Tens of millions spent in short order. The above pictures show Red River Co-Op shortly before they opened. Visible are the new apartments and condos coming as well.

Shopping malls were also getting additions from Kildonan to Polo Park or refreshes like Garden City and Grant Park. Tens of million spent again even as some of these buildings were at reduced capacity or even closed at some point. The reason: A bet on the future.

The pictures below are the recently completely Save on Foods and the still under construction movie theatres for Famous Players at Kildonan Place. Each hit over the last years has via department store closures has been responded to by a multi-million investment by its owners.

Princess Avenue has been particularly busy throughout the pandemic with building activity. The above pictures are old and new residential construction. Many of the new conversions are leaving room for commercial activity. In this case, the first floor window show another location for Harrisons Coffee. Given the amount of multi-unit housing in the area plus Red River Polytech, this could be a busier street than it has been in years. And in the 1970s and 80s, there were a number of businesses that operated in the area. Industrial, retail and restaurant. The thing that was spotty was residential. That has all changed now.

How it all connects is not known yet. The new campus building for Red River along with residential/retail still doesn't have a fully returned to work and school crowd back. And no one knows what the return to arts and festivals will be like. Has their been any permanent change to pattern of behaviour previous to 2020? If we are lucky, no. And by that I mean, will people return downtown for work and entertainment?

The new Innovation Campus Manitou a bi Bii dazigae has just been built off Princess and really hasn't had a chance to shine after in person learning was halted again. It may really only be in September of 2022 where we see attendance near normal in schools. And from there, we could see activity along Princess quite different from 2019.

As a car dominated city, it can be intimidating just getting out of the car to go get groceries. It is for this reason that some new developments are literally built beside a grocery and a pharmacy. In the case of the new luxury Taylor Residences, it built between a Sobeys and a Walmart. It is probably easier to walk than to find a parking space a hundred meters. away.

In front of the Walmart on Taylor itself more multi-unit residences are going up. It is hard to imagine someone needing their cars to drive the distance you would often park away from the store entrance on a busy day. Alas, some older neighbourhoods used to have grocery and pharmacy options that were walkable but those have since closed. Some suburban places never had them at all and it is a few kilometers hike.

River Heights has a few specialty grocers and convenience store but a senior would be hard pressed to be able live without transport compared to say...Osborne. It wasn't always that way. Up till the 1990s, there were three or four grocers along Academy Road. Now, one specialty shop. My parents, like a lot of seniors, had few options to move to a multi-unit place for senior assisted living in the area. Once you can't live in your house or need to downsize, you have to move out of the neighbourhood. This has to change.

According to census data, Winnipeg's population growth slowed even before during the pandemic. Immigration from outside Canada kept it from going into free fall. There was sturdy growth 2016/17 of 2%. It triggered a building boom of office, apartments and housing and the feeling was that 2020, Manitoba's 150, it would culminate in a period of growth and prosperity. The pandemic of Covid 19 changed that for Winnipeg. 

In fairness Toronto, Montreal and Vancouver have also seen population declines during this time but the fact that Winnipeg's started earlier is concerning. Brian Pallister became premier in 2016 and while Winnipeg was experiencing robust growth that year, the relationship between mayor and premier was frosty over the direction of the city. Much of the time communication channels were simply closed as the Progressive Conservative pursued health, education and other reforms while cutting service and as well as taxes.

A look down Fort Street as a crane dismantles another crane as Winnipeg's tallest building reaches completion.

The cuts to universities and healthcare have led to faculty and doctors leaving Manitoba. The cancellation of the CancerCare addition, multiple programs in health and wage freezes in post secondary education made it easy for professionals to shop their skills somewhere else. And they did. The pursuit of ending the deficit made health care particularly vulnerable to the pandemic. The ER and Urgent Care closures came just as the need for them could not be greater.

The Conservatives did see some big investments ushered in on agriculture and a few other areas but the austerity measures and tax cuts hurt both Winnipeg and the province because it is people that will help bring back a measure of prosperity. And if they leave they are not investing, not paying taxes and not helping the economy here.

A change in leadership has come with a flurry of announcements of policy shifts and investments in healthcare provincially. But these will take time and the pandemic is still hurting meaningful change till then. With an election in two years, the PCs have never been more unpopular. But will the NDP be ready to run the shop? There was a reason they were defeated in 2016. They purged five cabinet ministers who were seeking to change the directions of the party on policy. And when that didn't happen, the electorate purged the party.

We don't have the same advantages of other provinces with oil like Alberta and Saskatchewan. Now do we have the port and resources as well as climate of B.C. Ontario and Quebec have the industrial base. Manitoba has only one sizeable city compared to other provinces who usually have two or more fair sized cities. Even with all that, we punch above our weight with head offices and family businesses and diversified economy. 

Renovations of Grocery Stores all Over Winnipeg- Charleswood

Even as the pandemic continues, it seem every grocer has been renovating. The need for pick up and collect, delivery and other service needs is undeniable. Walmarts took over their auto sections to make way for this service and almost every other grocer/merchandiser is doing the same. Safeway/Sobeys and Real Canadians Superstore/Extra Foods had too much redundancy in the market and too much corporate exposure to newcomers Red River Co-Op Grocery and Save on Foods. Hence, the conversions all over the city to Fresco for some Safeway/Sobey's locations and some No Frills for Extra Foods locations. 

Charleswood Safeway in the picture is getting a makeover inside and out. Most Safeways have had alterations inside for their produce areas as well as deli but many have not had the full exterior and interior work we have seen going on nearly everywhere. Tuxedo Safeway is also going through it.

Red River Co-Op Grocery has new buildings going up at Seasons of Tuxedo and St. Norbert. There probably won't be a grocer that hasn't had a makeover by spring. And at that time, we might be out of the pandemic but will we have created new habits of click and collect or delivery.

Food prices have spiked and it has been bad but hopefully, a lot of of competition into the new year will see Winnipeg benefit in having better prices. A vaccine can't come soon enough.

Four Safeways to be Converted to Freshcos

The Safeway at McGillivary and Pembina last Thursday on one of my last walks. It will be the site of one of the four new Freshcos.

Some time ago I reported that Safeway/Sobeys was going to be converting stores into Freshcos. So far Winnipeg has two which are operated as franchises at Regent and Lagiomediere and at Jefferson and McPhillips.

Aside from the Pembina location, the other three Freshcos will be Safeways at Niakwa Village and on Sargent that will be converted to Freshcos and a former location at Bronx and Henderson that has stood empty since 2015 will be renovated and also be a Freshco but not till 2021.

All Freshcos will have pharmacies and be locally owned. The re-opening of the Bronx and Henderson location will create 100 new jobs while 100 jobs will be retained with the other stores.

There were far too many Safeway/Sobeys when the merger took place. Even when the combined company was forced to sell four stores by the federal government they still have stores across the street from one another operating under the same flyer and the same corporate policy. It made the overall company vulnerable to new competitors.

The benefits of local ownership have been demonstrated often by having Food Fare, No Frills and others here. They choose to sponsor different things, give chance to other products and more keyed in to local needs.

Obviously some union people will be affected. They will lose their jobs with the corporation and I'm assuming will be re-hired by the franchise owner. This could be a good thing or a bad thing depending on wage or working conditions. It will depend on the person. However, in the end there will be more jobs to be had that what existed before.

In all, some great news and for Winnipeg consumers, it could mean better prices overall for groceries.