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Why Retail Businesses Want to Expand to Canada

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By Devin Partida

As a result of the COVID-19 pandemic, many retailers are struggling to make ends meet and grow. Some retailers had to temporarily close their stores during lockdowns, and others had to shut their doors permanently.

As the pandemic continues to impact retail businesses across the country, business owners are faced with questions of whether or not to expand their operations overseas or across country borders. Many companies in the United States have decided to create e-commerce stores to help recoup their losses from the pandemic.

As more retailers look to make a comeback, some are crossing the border into Canada. But why?

Canada Boasts a Strong Economy

The most significant reason why more retail companies are expanding into Canada is that the country has a strong and stable economy. As of August 2021, Canada’s unemployment rate was at 7.1%.

Canada is a highly developed country with a strong and diversified economy. Some of its top industries are real estate, manufacturing, and oil and gas. Unfortunately, the retail sector was not immune to the effects of the pandemic, but retailers are showing promise as the world begins to open back up.

Because Canada is considered a neighbor to the U.S., it makes sense that retailers would look north to expand their operations. When companies in any given industry expand internationally, there are both benefits to reap and challenges to overcome.

Here are some examples of these benefits and challenges:

Benefits

  • A strong, growing economy
  • Ideal location
  • Lucrative, diverse markets
  • A skilled and educated workforce
  • Easy access to trade
  • Low expenses

Challenges

  • Navigating regulations
  • Dealing with unfamiliar tax laws
  • Social and political issues
  • Establishing physical locations

When retailers recognize the benefits and drawbacks of entering Canadian markets, it helps them decide if making the international move is a worthwhile investment. Many companies will hire a consultant to help navigate this transition and make the process easier.

Business That Have Expanded Into Canada in 2021

Because of its diversified economy and ideal location, Canada seems to be a great choice for businesses looking to expand their operations.

For example, DoorDash took advantage of the growing popularity of food delivery services and decided to enter Canadian territory to help rebuild the economy and execute various business initiatives.

Listed below are some other retailers that have expanded into Canada this year.

1. RayBan

A major player in the eyewear industry is RayBan, which recently moved to Canada. RayBan opened its first store in Canada back in 2020 and opened its second store in 2021. RayBan was founded in the United States but is headquartered in Milan, Italy.

2. L.L. Bean

L.L. Bean, known for its outdoor clothing and recreational equipment, opened four stores in Canada this year. When it opened an e-commerce store back in 2018, the brand found success and wanted to capitalize on it by opening brick-and-mortar stores.

3. Lululemon/Mirror

The home fitness industry has grown due to the pandemic with more people spending time at home. Lululemon, a major player in the fitness industry, decided to offer Mirror, its interactive home gym, in nearly 40 Canadian stores. Lululemon’s goal with this expansion is to strengthen its connection to the community.

4. Cake Boss

Carlos’ Bakery, star of the famous U.S. television show “Cake Boss,” is opening its doors in Canada and is expected to be ready by the end of 2021. Initially, Carlos’ Bakery launched Cake ATMs in Canada to understand how well they’d perform in the country. It must’ve proved successful, considering the company is opening its first bakery in Canada.

5. Chick-fil-A

Chick-fil-A announced its expansion into Canada back in 2018 with a new store location opening in Toronto. The company has faced challenges with its Canadian expansion, but it seems they’ve overcome those challenges as they plan to bring more sites to the country. In a press release, Chick-fil-A announced plans to open 20 more locations by the end of 2025.

The examples listed above show how successful companies can be in Canada. It’ll be interesting to see which other retail businesses decide to take advantage of Canada’s markets and expand into their territories.

Expect More U.S. Retailers in Canada

Canada is a great choice for retailers considering expansion. Due to its lucrative economy and ideal business location, more retailers may consider opening brick-and-mortar stores in Canada in the next few years.

Devin Partida is a writer and blogger, as well as the Editor-in-Chief of ReHack.com

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