As commercial developments spring up on the outskirts of Bracebridge at a frantic pace, downtown merchants say they’re feeling the pinch.

The same dilemma is being faced by small business owners across Canada, as market savvy megaliths like Wal-Mart and Home Depot increasingly wade into small town markets. To make matters more difficult for downtown retailers, increased development on the periphery of town has led to a mass exodus of operations looking for room to grow. Nonetheless, most merchants agree that as long as they aren’t going toe-to-toe with the big-box stores, there may be light at the end of the tunnel.

Steve McLellan has spent the past five years serving java at Muskoka Bean on Manitoba Street. McLellan said small-town Ontario has undergone a dramatic change in recent years.

“What downtown Ontario used to be is your bank, your cleaner, your flower shop, the butcher, the baker. None of these exist downtown because they’ve all moved to the outskirts of the community where there’s more parking and they have room to be bigger and better,” he said.

Business is down at Muskoka Bean this year, and McLellan said a lot of it has to do with the relocation of Bracebridge and Muskoka Lakes Secondary School (BMLSS) several kilometres outside the downtown core.

“The high school moving has had a negative financial impact on the downtown from one end to the other,” he said. “We’ve lost a lot of business. It’s not just the high school, it’s the town office, the Examiner, the clinic. I’ve lost all these customers. For a lot of them, it makes sense to move out, and it makes me consider the same thing.”

McLellan said for a business like his, the prospect of big-box stores hasn’t caused too much distress.

“Wal-Mart’s a necessary evil,” he said. “I think it actually attracts more people to the community, and if they choose to shop downtown that’s great, even if it’s just two or three per cent.”

Chris Bilissis, owner of the Dairy Bar Restaurant, said business has slowed but he isn’t pushing the panic button just yet.

“Welcome to the world of free enterprise,” he said. “It’s like a vacuum that’s taken out a lot of business from the downtown core. I’m holding my ground, but it definitely takes away.”

Bilissis said during the summer, Bracebridge can support any number of businesses, but the consumer base is stretched thin after the cottagers pack up for the year.

Bilissis called the departure of BMLSS a “knife in the back” which, combined with the recent opening of several new restaurants, has forced him to make some difficult decisions to cut costs.

“There are too many fish in the ocean right now,” he said. “I’m a patient person, it’s going to turn around, but it will take some time. The restaurant business is like a marathon. It’s not a 100-yard dash.”

If developer Brian Otis gets it his way, the local market could soon get even more crowded.

Otis and his partners are currently working on a 300,000-square-foot commercial development just south of Gravenhurst, and have plans to launch a similar development at the intersection of Hwy. 118 and Hwy. 11.

“It’s a prime piece of land for commercial development. We can hit all that transient traffic going to Huntsville and beyond,” he said.

Otis has developed properties throughout Ontario, and his tenants include virtually every big-box store in business.

The Bracebridge market is far from saturated, said Otis, and the introduction of new businesses will be a boon for the entire community.

“It’s a huge tax base, a huge employment opportunity and it keeps young people in the community and gives them opportunities,” said Otis. “It also creates real competition and helps lower prices.”

Otis said he has made little headway with the town in his efforts to have the property rezoned, but he’s optimistic they will eventually come on side.

“It’s not the municipality’s job to dictate who can come. It should be dictated by the market,” he said. “These retailers are extremely sophisticated. You can be sure they aren’t going to invest tens of millions of dollars into a community without having a pretty good feeling that they’re going to be successful.”

Mae Brazier is president of the Bracebridge Improvement Area (BIA), which represents most of the downtown businesses. Like Otis, she said the development boom could actually work in the BIA’s favour.

“I’m optimistic. I think it will encourage people to stay in town,” she said. “There’s always going to be people who jump up and say ‘No, I don’t think a Wal-Mart should have come to this town’ . . . but growth in general is good, and you can’t prevent it.”

Brazier said the key for downtown merchants is to find a niche and offer things the big-box stores can’t.

“You need to stand out in the crowd,” she said. “You need good service and quality. I sell quality, I’m not being critical of Wal-Mart, but you’re certainly not buying quality there.”

Competition forces businesses to stay sharp and constantly self evaluate to stay viable, said Brazier.

Just like other towns across the country, downtown Bracebridge is going through transition, said Mayor Don Coates.

“All the development . . . doesn’t detract from the main street, it adds to it,” he said. “It brings more people to the community and it creates jobs.”

Coates said the location of new commercial developments funnel potential shoppers through downtown as they make their way from one area to the next. The municipality has always made downtown a priority with projects like the streetscape, facade improvement program and the new snow removal system, he said.

“Of course there’s increased competition,” said Coates. “Downtown will have a very difficult time competing with the Wal-Marts of the world, but I know from talking to merchants that they aren’t necessarily looking at the same market. Downtown is focused on specialty shops. I see it being vibrant for a long time.”