Moncton shop owner says pop-up at City Hall gives chain store an unfair advantage

A business operator in Moncton is not happy about a pop-up store that's opened on the front lawn of City Hall for the Christmas shopping season.

Lush Fresh Handmade Cosmetics has made a deal with the city to lease space for a temporary store built on a deck of plywood, with walls made entirely of windows and a white tent top for a roof.

"What makes us most upset is the fact that it is a pop-up store," said Shane Myers, co-owner of the Starving Artist Gallery and Creative Works Moncton.

The company will pay $3,000 plus its power bill, to use the location for 20 days, said Kevin Silliker, the city economic development officer.

"We thought that was reasonable and fair based on market rent," Silliker said.

Myers sees it as unfair.

"We just want a level playing field," he said.

"The rest of us are paying our full tax bill, and our full rent bill, our mortgage bills and having to compete against a large corporation that is only setting up a pop-up store with no promise of coming permanently anyway."

The costs for a brick-and-mortar shop add up to far more than $3,000 a month, he said, and a prime location is being thrown into the bargain.

"Wouldn't it be nice if we could all test market our businesses on the front lawn of City Hall?"

And it's happening at a time of year that permanent retailers depend on to sustain them year-round, Myers said.

A prime season

He questioned whether the pop-up shop would essentially be poaching a share of the "finite amount of disposable income," local shoppers have to spend.

"Christmas is the most special time for us."

"If they're just coming in to do a big splash and get publicity ... then we may lose more than we're going to gain."

But most of the thousand or so downtown businesses are happy about the deal, according to Downtown Moncton Inc.

"We think this is a great opportunity," said Anne Poirier Basque, whose group is focused on promoting development.

"It's always in our advantage to try and have someone downtown that will bring in more traffic."

Poirier Basque said pop-up shops have been allowed in the downtown before with good results.

Four years ago, some local artisans had temporary shops for a period of about three months, she said.

Christmas lights went up in those areas and activity increased.

"It was really nice to see."

Targeting young shoppers

Poirier Basque expects the Lush shop will attract younger shoppers to the downtown area.

"It's a win-win situation, I think, for everyone," she said.

Myers said the issue raises bigger questions about what the downtown should be.

"Do we want it to have lots of corporate stores? Or do we want to help incubate local entrepreneurs to create an environment that is kind of fun and interesting?"

Silliker said there were internal debates at city hall about the pop-up shop.

Staff don't want to adversely affect other businesses but had heard from downtown retailers who want to see a new, well-known anchor tenant.

Lush seemed a good fit, he said.

The city tried to get the cosmetics company into existing retail space, said Silliker, but Lush didn't think it could get set up quickly enough.

He hopes the pop-up shop will be a precursor to a permanent store.

"There are no guarantees," said Silliker. "This is where the relationship is important.

"If we want them in the downtown, we need to show them that we're there and working with them."

The city often does this kind of thing with potential commercial tenants and developers, he said.

"We take a concierge kind of approach in hoping to win their business."

With respect to costs, Silliker acknowledged that Lush would have paid about $4,000 to rent a smaller space than it will have in its pop-up shop.

But he noted that besides their lease and power bill, they'll also have to hire security at the pop-up shop and they aren't getting a full month in the location.

According to an emailed statement from Lush, the company wants to support and have a positive impact on the local economy.

"As a brand that comes from small business roots, we are in no way trying to benefit or detract from other businesses in the city," said senior publicist Jennifer Graybeal.

Moncton is one of the company's most requested locations for a permanent shop, she said.

Some pop-ups have been "very successful," said Jim Cormier, director of government relations in the Atlantic region for the Retail Council of Canada, leading to a permanent store perhaps a year down the road.

"Retailers are being more cautious before they commit to bricks and mortar."

That's because they are facing stiff competition from international retail giants that sell online.

One response to 'showrooming'

Pop-up shops are just one of "a million" different marketing strategies being deployed, he said.

"Showrooming is one of the biggest reasons for it."

That's when a customer goes into a "bricks and mortar" shop just to test or try on the merchandise before purchasing online from somewhere else.

Cormier didn't want to take a position with respect to the shop on the lawn of Moncton City Hall. He suggested that anyone who has an issue with it should contact the city.