With Target Canada’s recent bankruptcy casting a seemingly negative light on the Canadian retail market, it may not be readily apparent that many Canadian retailers are actually thriving. Sales at Canadian malls have increased by 5.8 percent over the last 12 months, averaging $673 per square foot, according to the International Council of Shopping Centres (ICSC). That is 12 percent greater than what American retailers sold in the U.S., who averaged US$475 per square foot.
Canadian discount stores like Costco, NoFrills, and Dollarama have been very successful. Dollarama is fronting the competition amongst “value” chains. Now selling everything from home decor to health products to gardening supplies for under $3, the Montreal-based retailer opened 17 stores across the country earlier this year bringing its total to nearly 1,000 stores. According to company management, an additional 450 stores are planned to open in the near future. Rivalling Dollarama’s impressive growth is Walmart, which plans to increase its network of approximately 400 mega big-box stores by another 13 locations, previously owned by Target.
Luxury stores such as Apple, Lululemon, Louis Vuitton, Whole Foods, and Starbucks are flourishing in Canada too. Per CBRE, Vancouver’s Lululemon had the highest sales per square foot of any Canadian retailer in 2013 with an astounding $2,961 per square foot – four times the national average. But that dwindles when compared to Apple, whose popular (and expensive) electronics earned its stores a whopping $7,241 per square foot.
The diversity of stores that Canadians shop at is beginning to reflect the widening gap between the high- and low-ends of the retail market place. Market share is moving away from the middle market towards off-price and luxury. Canadian retailers falling in the middle include Sears, Reitman’s, and of course, Target.
Larissa Kriksciunas
Analyst – Toronto, ON Office
Phone: (416) 362-2122 ext. 220
lkriksciunas@largocapital.com
