Local businesses hope to remain profitable during NHL lockout
Local businesses are battening down the hatches for what could be a long, cold winter without the Calgary Flames. However, the assumption that Calgary is going to take a big economic hit without hockey may not be entirely true.
When the lockout started last month, the Calgary Herald published a story in which Flames president Ken King warned Calgarians to expect a gloomy economic climate as long as the on-going labour disagreement keeps skates from hitting NHL ice this winter.
But the businesses hardest hit by the lockout – bars – may be able to cushion that blow, and sports experts say the impact of the hockey lockout has been overstated.
“When a lockout happens, fans don’t just curl up and die,” explained Michael Leeds, an economics professor at Temple University.
Photo by Max ShilletoInstead, they look for other ways to spend their entertainment dollars. That’s what one of the watering holes along Calgary’s infamous Red Mile is hoping to take advantage of.
Melrose Café and Bar recalls the lockout in 2004-05 being a disaster and predicts a 25 to 30 per cent drop in business this year if the labour action continues.
Bars see profit in other sports
But, marketing manager Tony Johanson acknowledged, “Thanks to Thursday night footballs games we’ve really been able to build up our NFL program and thank God GSP will be back soon,” a reference to the popular Ultimate Fighting Championship athlete Georges St. Pierre.
In fact, patrons of Cage Aux Sports, a Quebec chain of sports bars, may have well been watching GSP during the last NHL lockout seven years ago.
According to the Montreal Gazette, the bars were able to weather that storm by promoting other sports events and menu items.
As a result, the chain was able to increase sales by as much as 2.8 per cent to $91.9-million from the year before.
According to Vancouver-based sports writer Bob Mackin, businesses who remember 2004-05 will be the smart ones — engaging in “smart marketing” to appeal to a greater diversity of sports fans.
“When a lockout happens, fans don’t just curl up and die” – Dr. Michael Leeds, economics professor at Temple University.
But even those that don’t may not have as much to worry about as they think.
Mackin said he believes a strong line-up of concerts coming through western Canada this fall — including Neil Young and the Red Hot Chili Peppers – could soften the lockout blow felt by businesses close to the Scotiabank Saddledome.
Not all businesses will be affected
Photo by Max ShilletoAs for those businesses that aren’t saddled up to the dome, Mackin stated the effect of the lockout will be like “dropping a rock in the water. The further away a business is from the arena, the less impact there will be.”
In fact, according to Leeds, Calgary residents don’t actually have much to worry about.
“Sports teams draw attention that is completely disproportionate to their economic footprint,” he said, stating the economic impact a professional sports franchise has on a city is similar to that of an average-sized department store.
To make a comparison, Sears Canada’s revenues in fiscal 2011 were $4.6 billion across the entire chain. The NHL projected its revenues in the same fiscal year would be $2.9 billion.
Moreover, restaurants, movie theatres and shopping malls – among others – will be more than happy take over as a destination for Calgary residents to spend the entertainment dollars they might have otherwise handed over to NHL-related activities.
And while Canadian hockey fans and beer drinkers often seem to be one in the same, the absence of NHL stars on television screen does not necessarily eliminate their thirst.
As Leeds put it, if your favourite restaurant closes, it doesn’t mean you’ll stop eating. It just means you’ll find somewhere else to eat.