2018 to mean more challenges for Canadian retailers


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

Some in the Canadian retail sector may be spared if they seem glad to see the end of 2017, a year that brought unrest and closures. The year was punctuated by the failure of Sears Canada. The department trust in chain sought creditor protection in June and ultimately went into a liquidation treat that will see it close about 190 stores, ending the trades of about 15,000 employees.

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

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

‘Wake-up call’

As retailers count their believe from this year’s holiday shopping season, Willy Kruh, extensive chair for KPMG’s consumer and retail practice, says he expects a “to some degree reasonable” increase of five per cent in holiday sales, and healthy limits.

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

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

“More than they’ve for ever 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 evaluations are high,” he said.

“So there is a lesson there, and there is something to be seen by that,” he thought. “It’s not a coincidence, and similar things are happening in Canada.”

Retail casualties

Bruce Winder, co-founder and fellow at Retail Advisors Network, said online shopping has grown to a appropriateness in the U.S. that it is creating casualties in traditional bricks-and-mortar retailers that are exhausted financially or strategically, or that have not adapted to the new normal. He said the but thing will happen in Canada in a few years, as we are behind the U.S. and the U.K.

“This has been event for a few years but we are now at a tipping point where larger, well-known chains are being impacted,” he implied, pointing to Toys “R” US, Macy’s and HBC.

Canadians will continue to shop multifarious online through companies such as Amazon, which is increasing its infrastructure in Canada with a new Calgary supplies and hiring in Vancouver, he said.

That growth in dollars going into online peach oning means lower profit margins for bricks-and-mortar stores who are forced to participate in it, Winder believed.


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

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

Kruh sees three factors pilot the retail scene, including:

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

The formulation of millennials will be the biggest demographic group within a few years, and Kruh suggested they seek an “experience” when they shop. Retailers devise need to understand the experience and entertainment quality that consumers hankering and — millennials, particularly — need, whether they’re going into a trust in or doing their shopping online, he said.

“If you don’t grab them … they’re pathetic on and never coming back,” he added.

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

Population growth in Canada is propelled by immigration, making it critical that domestic retailers adapt to the purchasing habits of new Canadians, Kruh’s KPMG said in a recent forecast. At the after all is said time, a wave of populism and nationalism is affecting retailing in the U.S. and Europe with spill-over effects in Canada, the resolute said.

Among the winners

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

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

He also cited attiring company Canada Goose, which is a manufacturer with some time-honoured stores and an e-commerce division, as a strong brand with good bankroll for growth from the success of its initial public offering.

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

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