Small retailers believe large corporations get preferential treatment from government: CFIB

A majority of small retailers say they’re losing customers and revenues to big businesses.

The Canadian Federation of Independent Businesses (CFIB) released a new report today (Oct. 19), Small Business, Big Impact: Small Retailers’ Local Contributions, in partnership with Scotiabank.

It found that, on top of trying to compete with multinational companies and online giants, small independent retailers feel their governments are not looking out for them.

Eighty four per cent say they believe larger corporations get preferential treatment from government – such as tax breaks, regulatory exemptions and access to funding opportunities. 

Over three quarters (78%) of respondents say they’re losing out to large corporations. 

“The challenge of competing with multinational retailers and online giants is not going away any time soon,” the report says. “If government does not level the playing field, there is a risk that small retailers’ market share and profitability will erode.”

CFIB put forth several recommendations for governments, including: supporting public awareness campaigns around local businesses; ensuring equitable policies, including making the Canadian Digital Adoption Program (CDAP) more accessible to small businesses and modernizing competition law in Canada; and reducing costs and red tape, such as lowering federal and provincial small business tax rates. 

“Implementing policies that support small business growth, such as lowering taxes, reducing red tape, and increasing the accessibility of programs that help small businesses adapt to the changing marketplace can help bolster their competitiveness. Encouraging community support and fostering awareness of the impact of consumer choices on local businesses can also play a pivotal role in maintaining the diversity and vibrancy of provincial economies,” the report says. 

Over nine in ten Canadians (92%) said they love having small businesses in their community, but only 13% do most of their shopping at independent retailers.

Fifty five per cent say they shop more at large retailers now than they did five years ago. However, 84% say they would like to do more of their shopping at small independent businesses.

When choosing where to shop, price is the top priority for consumers, as noted by 86% of respondents. 

Among those that reported frequenting multinational retailers significantly more, price was even higher on the list, with 90% indicating it was important to them. For consumers that do significantly more of their shopping at small independent businesses, however, the most important factor for three in four (74%) was supporting their local community. While still important, price was selected by far fewer consumers that prefer shopping small (56%). 

“Despite the many contributions that small businesses make to their communities, most consumers don’t support them on a daily basis even though they recognize the importance of shopping local. There are many misconceptions among consumers, including that small retailers and multinational businesses contribute to local economies equally. In fact, when you shop at a small, independent retailer, six times more of that money stays in your local economy than when you shop at a large multinational retailer,” said Taylor Matchett, CFIB’s senior research analyst and co-author of the report, in a statement.