What to know
- A new Merchant Growth survey found 39 per cent of Ontario small businesses have seen weaker consumer demand this summer, while 45 per cent say rising utility bills are putting added pressure on their finances.
- Experts say extreme heat, wildfire smoke, economic uncertainty and the rising cost of living are keeping customers indoors and reducing foot traffic for food and retail businesses.
- Toronto pub owner Cesar Mesen says customers are avoiding patios during heat waves and poor air quality, opting to stay inside where air conditioning is available.
- Keeping businesses cool comes at a cost, with owners facing higher electricity bills, around-the-clock air conditioning use and expensive emergency repairs as equipment struggles in extreme temperatures.
- With hotter summers expected to continue, many small businesses are cutting costs, delaying hiring and preparing for unexpected expenses to remain financially resilient.
Intense heatwaves can be hard to navigate for everyone, including small businesses that say dealing with air conditioning, emergency repairs and diminished foot traffic is wiping them out in what is usually a lucrative time of the year.
Ontario just faced its second heatwave of the summer, with temperatures reaching close to the 40s on Wednesday. In addition, the province is under a smoke blanket, as wildfire smoke travelling from northwestern Ontario leads to hazardous air quality across the province.
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Extreme temperatures and poor air quality put all residents at risk, and could lead to dangerous health symptoms for everyone, especially seniors, children, and those with pre-existing conditions.
But residents’ health and wellness is not the only thing suffering with the intense weather.
A small business expert and a business owner are warning that intense heat waves and weather events are wiping them out during the warmer months.
Businesses facing less foot traffic
David Gens, founder and CEO of Merchant Growth, tells Now Toronto that many food and retail businesses in Canada benefit from higher foot traffic during the summer. But now, the heatwaves appear to be getting in the way.
According to a new Merchant Growth survey, 39 per cent of Ontario small business owners said consumer demand has been weaker this summer, leading to new financial pressures.
Gens said the decrease in foot traffic could be linked to economic uncertainty, as Canada faces fuel prices’ volatility, rising cost of living, and a technical recession label in the first half of the year.
“It’s really hard to run a small business when things are changing all the time, and it’s hard to predict things, and it’s hard to plan, and that can leave small businesses in a challenging position when that’s the case,” he explained.
Cesar Mesen, owner of Toronto-based pub The Pint, said that while people usually demand patio spaces during the summer, a lot of customers have also been preferring to stay indoors during the waves, or over poor air quality.
“Sunday and Monday were particularly slow for this time of the year, and although our patio was ready to serve, the few people that came in, nobody wanted to go into the patio,” he told Now Toronto.
“They don’t want to be out. They want to be inside and they want to enjoy a little bit of air conditioning and some refreshments. It’s very understandable.”
Air conditioning and maintenance costs
In addition to facing less demand than normal, 45 per cent of businesses that responded to the survey said rising utility bills have also become a major cost pressure this summer.
With more constant and intense heat waves, a lot of businesses have to keep their air conditioning systems running all the time, which also brings their bills up, as they look to balance extra costs with consumer experience.
“We’re in the business of hospitality that revolves around comfort and a good experience. And obviously, on days like this, to have comfort and a good experience, you require a very good air conditioning system that is going almost 24/7,” Mesen said.
“[It] is great that we can provide [this] to our guests, but at the same time [it] is an added cost.”
In addition to the energy costs of keeping the air conditioners on all day, Mesen said the extra pressure on the system and the humidity coming from the outside can also damage equipment, leading to yet more costs with maintenance.
“In the last couple of weeks, two of our air conditioning units have broken, and that never happens at the right time…then you have to call people and do overnight calls, which is usually double labour, and that costs a lot of money. So, that is one of the inconveniences of it,” he added.
Small businesses are working to stay afloat
With experts predicting hotter-than-normal temperatures this summer, small businesses look for alternatives to stay afloat.
According to Merchant Growth, 61 per cent of surveyed businesses say they are focused on strategies to reduce their expenses, from reducing staff to delaying new hiring.
For Mesen, this includes staying up-to-date with any emergencies by double-checking the restaurant’s equipment and hiring maintenance service when needed. However, he says it can be hard to keep up, as he can’t always predict when new costs will surge.
“Unfortunately, there is no navigation that can be done. These are things that just have to happen, right? I don’t want my air conditioning to break, nobody does, but once it does, you have to act on it,” he said.
“We do our best to keep things working and working properly, and we have maintenance programs, [but] it’s not 100 per cent bulletproof.”
In order to stay prepared, Gens recommends small businesses remain “close to their numbers,” making sure they understand their cash balances and have access to capital for any emergencies.
“We have to give credit to small businesses [owners]. [They are a] very resilient group of people. They chose a career that involves a lot of stress, a lot of change management, and having to think and worry about a whole bunch of different issues in order to succeed.”
