From The Desk: Retail real estate shifts, selective expansion and operational discipline

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It’s been another interesting week in Canadian retail, with some significant developments in how shopping centres are evolving, where retailers are investing, and how businesses are responding to a consumer who is increasingly selective about where to spend.

One of the bigger stories continues to be the transformation of retail real estate. Landlords are finding new opportunities in spaces once occupied by large department stores, bringing in multiple tenants and rethinking how these properties can generate traffic and revenue. We’re also seeing international brands continue to invest in Canada, even as other retailers take a more cautious approach to expansion. It’s an interesting contrast, and one that says a lot about where the industry is heading.

Technology is another theme worth watching, particularly as retailers look for practical ways to use artificial intelligence, improve operations and connect with customers. Meanwhile, smaller businesses continue to face considerable challenges, from rising costs to changing shopping habits. There’s no shortage of innovation in the industry, but the fundamentals of running a profitable retail business remain as important as ever.

As always, there’s plenty happening across the country, from major investments and new store openings to the smaller stories that often tell us just as much about the state of retail.

Here are some of the stories and developments that caught our attention this week.

Retailer News

Primaris REIT is progressing its shopping centre transformation by increasing long-term leases to 728,000 square feet in former Hudson’s Bay spaces and aiming to raise rental income fourfold through redevelopment and selective acquisitions like Upper Canada Mall while divesting weaker assets. Cadillac Fairview’s redevelopment of the former Nordstrom premises in Vancouver will add UNIQLO’s first downtown Metro Vancouver store at CF Pacific Centre next spring, joining tenants like Aritzia and Simons and strengthening the retail draw of this central location. Vancouver also sees a new mixed-use approach with Oakridge Park debuting Wonderground, a reservation-based interactive gaming experience by Moment Factory that supports versatile brand activations and events, broadening the mall’s entertainment appeal.

In Eastern Ontario, Kastners Men’s and Ladies Wear in Cornwall will close by January 2027, reflecting the challenges traditional independent fashion retailers face in smaller cities due to evolving consumer preferences, online competition and succession issues. Italian fashion brands Intimissimi and Calzedonia are starting their Canadian rollout with first stores at Toronto’s CF Sherway Gardens, signalling rising international interest and ILT Group’s plan for 20 locations emphasizing customer engagement before expanding to e-commerce.

August retail trade rebounded 1.2% driven by motor vehicle dealers, food and beverage, and general merchandise retailers, offsetting declines from the previous month. This strength contrasts with flat overall Canadian GDP, reflecting uneven growth across sectors and raising caution for retail and real estate stakeholders on sustained demand. Payroll employment in retail decreased by 4,400 jobs in August, with sharper declines in accommodation and food services, even as job vacancies held steady at over half a million. This persistent labour market tightness creates operational challenges for retailers and pressures for landlords regarding workforce stability in retail and hospitality properties.

Restaurant Brands International reported a 6.2% year-over-year increase in system-wide sales for the third quarter, reaching nearly $13 billion and supported by growth in key brands and international markets. The restaurant sector saw an eighth consecutive monthly sales increase of 0.3% in August to $8.9 billion, despite ongoing profitability pressures affecting two-thirds of operators. Investments in supply chain capacity and retail technology highlight how Canadian retailers aim to balance higher costs with improved efficiency, making resilience in logistics and AI applications practical priorities.

Retailer People News

Meghan Roach is stepping down as President and CEO of Roots following the company’s acquisition by Marquee Brands and JM&A Design & Development, though she will remain as an advisor to support the transition. This change marks a shift for Roots as it moves from public to private ownership, setting the stage for new leadership to drive product innovation and expansion efforts under the new owners.

Rethink Retail has expanded its executive communities under Canadian CEO Marie Chevrier Schwartz, appointing Chris Parsons as VP of Audience to help lead developments in AI, retail media and supply-chain collaboration. These efforts aim to enhance collaboration among retail professionals tasked with integrating technology and improving customer experience, illustrating growing industry recognition of executive networking as a driver for operational success. Calgary-born singer Tate McRae has entered the beauty retail sector by launching TATE 01, a debut fragrance developed with Scent Beauty and sold exclusively at Sephora Canada and online internationally. Her partnership with Sephora leverages her strong fanbase to establish the brand, exemplifying how collaborations between celebrity brands and major retailers are becoming a notable trend in product exclusivity and differentiated offerings.

Retailer Op-Eds

Lululemon is using fashion collaborations and culturally relevant events to spark renewed consumer interest as it faces sales pressure. The GANNI partnership and dance-focused pop-up in Brooklyn follow a playbook similar to Gap’s recent brand revival that mixes product and lifestyle to rebuild engagement. Such experiential marketing aligns with a longer trend in retail and commercial real estate toward blending store purpose and community culture to sustain foot traffic and demand.

At the same time, Canada’s move to end daylight saving time could shift consumer routines in ways that affect grocery and restaurant traffic. Retailers and policymakers need better data to understand how permanent clocks may change when and how Canadians shop and eat, since research links daylight timing to spending patterns. This challenge sits alongside retailers’ broader efforts to improve digital marketing, upgrade store formats and balance technology with authentic human connection.

Editor’s Take

One of the more interesting developments in Canadian retail right now is how much investment is going into making existing properties work harder. Rather than simply building more retail space, landlords are rethinking what they already own, particularly former department stores that occupied enormous amounts of space without necessarily generating comparable returns. Primaris REIT’s plans to subdivide former Hudson’s Bay locations are a good example. Replacing a single large tenant with several retailers can create new leasing opportunities, bring different customers into a shopping centre and potentially generate substantially more rental income.

We’re seeing a similar emphasis on productivity among retailers themselves. Aritzia’s ambitious U.S. expansion plans and UNIQLO’s investment at Vancouver’s CF Pacific Centre suggest that strong brands still see considerable opportunity for growth. But they’re being deliberate about where they invest, with an emphasis on locations that can attract customers, strengthen brand awareness and support long-term sales. It’s also worth remembering that a larger store isn’t necessarily a riskier investment if it can generate stronger sales and operate more efficiently.

What concerns me more is the growing divide between retailers with the resources to invest and those operating with much smaller margins for error. Larger companies can spend on technology, supply chain improvements, marketing and new store concepts, while many independents are simply trying to manage rising costs and keep customers coming through the door. The closure of Kastners after more than a century is a reminder that longevity alone doesn’t guarantee survival, particularly in smaller markets where changing shopping patterns can have an outsized impact.

Artificial intelligence, loyalty programs and experiential retail will continue to attract attention, and some of these investments will undoubtedly deliver results. But technology and innovation are only valuable when they improve the business. For all the discussion about the future of retail, the fundamentals haven’t changed much: understand your customers, control costs, invest wisely and give people a compelling reason to shop with you.

The retailers and landlords that get those fundamentals right will be in a much stronger position as the industry continues to evolve.

This Week’s Articles

Retailer News

Retailer People News

Retailer Op-Eds

News From Around the Web

Craig Patterson
Craig Patterson
Located in Toronto, Craig is the Publisher & CEO of Retail Insider Media Ltd. He is also a retail analyst and consultant, Advisor at the University of Alberta School Centre for Cities and Communities in Edmonton, former lawyer and a public speaker. He has studied the Canadian retail landscape for over 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees.

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