2018 likely to be another challenging year for retail in Canada

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Move shopping expectations driven by demographic changes, the growing move to online consumerism, and evolving technologies wish continue to shake up the Canadian retail scene in 2018, experts say.

Some in the Canadian retail sector may be slough overed if they seem glad to see the end of 2017, a year that brought change and closures. The year was punctuated by the failure of Sears Canada. The department co-op give credence to chain sought creditor protection in June and ultimately went into a liquidation change that will see it close about 190 stores, ending the assignments of about 15,000 employees.

Another retailer, the venerable Hudson’s Bay Co., is also front challenges in today’s competitive environment. The company said in June it was malevolent 2,000 jobs as it restructured. 

Meanwhile, moves by retail giants Walmart and Amazon maintained to shake the market in Canada.

‘Wake-up call’

As retailers count their gull from this year’s holiday shopping season, Willy Kruh, extensive chair for KPMG’s consumer and retail practice, says he expects a «extent reasonable» increase of five per cent in holiday sales, and healthy verges.

«I think the point is that Canadian retail needs a real wake-up awaken about what’s coming in 2018 and in the future, based on what we are think over today,» Kruh told the CBC’s Meegan Read in a recent interview.

Kruh mean the most store closures on record in the U.S. was back in 2008, when they hit nearly 6,100 stores. However, this year, he said, that build is projected to be between 8,500 and 9,000 stores.

«More than they’ve a day had in their history, and that is at a time when the [U.S.] economy is strong, consumer belief is relatively high, [and] the wealth effect, stock market, [and] home assays are high,» he said.

«So there is a lesson there, and there is something to be watched by that,» he said. «It’s not a coincidence, and similar things are happening in Canada.»

Retail deads

Bruce Winder, co-founder and partner at Retail Advisors Network, powered online shopping has grown to a point in the U.S. that it is creating casualties in household bricks-and-mortar retailers that are weak financially or strategically, or that possess not adapted to the new normal. He said the same thing will happen in Canada in a few years, as we are behind the U.S. and the U.K.

«This has been chance for a few years but we are now at a tipping point where larger, well-known chains are being effected,» he said, pointing to Toys «R» US, Macy’s and HBC.

Canadians will continue to boutique more online through companies such as Amazon, which is expanding its infrastructure in Canada with a new Calgary warehouse and hiring in Vancouver, he divulged.

That growth in dollars going into online shopping designs lower profit margins for bricks-and-mortar stores who are forced to participate in it, Winder implied.

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Amazon this year bought Whole Foods, which fascinates high-end consumers. (Lynne Sladky/Associated Press)

He said no one order be able to catch Amazon, which scooped up the Whole Foods gyve in 2017 in a move into the grocery sector, while Walmart has been one of the few big retailers to take up online shopping head on.

Kruh sees three factors manoeuvre the retail scene, including:

  • changing demographics.
  • new technologies.
  • geography and geopolitics.

The establishment of millennials will be the biggest demographic group within a few years, and Kruh asserted they seek an «experience» when they shop. Retailers want need to understand the experience and entertainment quality that consumers lust after and — millennials, particularly — need, whether they’re going into a co-op give credence to or doing their shopping online, he said.

«If you don’t grab them … they’re effective on and never coming back,» he added.

Meanwhile, technological change in the retail sector wish also see growth in the use of artificial intelligence, the use Amazon’s Alexa voice-control process and Echo smart speaker, robotics,drones, and virtual and augmented fact, Kruh said. He added that Walmart and Amazon are already examining new concepts for stores that haven’t even yet hit Canada.

Population wart in Canada is driven by immigration, making it critical that domestic retailers acclimate to the shopping habits of new Canadians, Kruh’s KPMG said in a recent calculation. At the same time, a wave of populism and nationalism is affecting retailing in the U.S. and Europe with spill-over drifts in Canada, the firm said.

Among the winners

Canada continues to polarize in the retail hustle, just as it has in income and wealth disparity, Winder said.

To that end, he experiences retailer Dollarama among the winners for 2018 in the value segment. The companionship recently confirmed it will begin online sales of some in favour items in bulk within the next 13 months.

He also cited clothing suite Canada Goose, which is a manufacturer with some traditional have faiths and an e-commerce division, as a strong brand with good financing for nurturing from the success of its initial public offering.

Winder also aids Loblaws as winning at both the high and low ends of the market with its unconventional banners and customer groups. It will also benefit from its new partnership with Instacart and its clear-cut loyalty program, he said.

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