Retail Council of Canada has released its first study that ranks Canada’s top shopping centres based on annual sales per square foot, size, and annual pedestrian count. Comparisons to top US centres are also made for each of these. The study then provides insight into trends seen among leading malls, including the importance of reinvestment.
The study ranks Canada’s top shopping centres by sales per square foot, with Toronto’s Yorkdale Shopping Centre ranking first with a productivity of almost $1651. Vancouver’s Oakridge Centre ranked second with annual sales per square foot of $1,537, followed by Vancouver’s CF Pacific Centre with a productivity of $1,523 per square foot. A total of 30 Canadian shopping centres were ranked as per the report, which will be used as a benchmark for future Retail Council of Canada shopping centre studies.
Canada’s 10 largest shopping centres are revealed in the study and, with no surprise, West Edmonton Mall is first. The Edmonton mall features retail as well as expansive entertainment and food components, reflecting a trend among malls to become ‘entertainment centres’. Toronto’s CF Toronto Eaton Centre ranked second in size, partly due to the vast size of its Hudson’s Bay building component, which also houses Canada’s 170,000 square foot flagship Saks Fifth Avenue store. The Mall of America, located in suburban Minneapolis and under the same ownership umbrella as West Edmonton Mall, ranked second on the continent in terms of size.
The Retail Council of Canada study then ranks Canada’s top 10 busiest malls by annual visitors (aka ‘footfall’). Remarkably, CF Toronto Eaton Centre, with almost 50 million visitors, sees more people annually than the Las Vegas Strip, Disneyland and Disney World combined, and almost as many as New York City’s Times Square. The Toronto mall is the busiest in North America, with Honolulu’s Ala Moana Center and Minneapolis’ Mall of America trailing by eight and 10 million annual visitors, respectively.
The study notes, referencing statistics from International Council of Shopping Centres (ICSC), that Canadian malls are, on average, more productive in terms of sales per square foot than those in the United States. Canadian malls averaged $744 (Canadian) per square foot in 2016, while US malls averaged US $466 per square foot. A number of factors may be at play, including the fact that Canada has less retail space per person — according to CBRE statistics, Canada has 16.5 square feet of retail space per person, versus 23.6 square feet in the US.
Ten Canadian regions are examined in depth, providing demographic information as well as a summary of selected top shopping centres. Regions vary widely, for example, when examining factors such as retail space per capita and average sales per square foot. Vancouver malls rank top in terms of productivity, according to ICSC numbers, averaging a whopping $1,019 per square foot annually. Toronto malls ranked second, at $860 per square foot.
The Retail Council of Canada study then goes on to discuss some trends in the industry, including expanded entertainment options, renovations and expansions, enhanced food/beverage options, pop-up retail, and the polarization of retail, among others. “Investing in malls with strong anchors, healthy upscale food courts and restaurants is helping drive traffic to stores,” said Farla Efros, President of HRC Retail Advisory, when asked to comment on her opinion about what landlords need to do to keep malls competitive.
The University of Alberta School of Retailing Consulting Group is now accepting consulting projects for the spring of 2017. The School’s highly motivated students have been involved in various projects, ranging from brick-and-mortar evaluations to e-commerce overhauls.
Consultants are up for various challenges, including (and not limited to) feasibility studies, commercial needs assessments, digital strategy, e-commerce analysis, penetrating strategy and gap analysis, market research and Google trend reports.
The School of Retailing Consulting Group (SOR|CG) is an entity within the School of Retailing at the University of Alberta’s School of Business. Managing Partners Dr. Kyle Murray and Emily Salsbury-Deveaux launched the group in October 2014, with a goal to provide cost-effective consulting for the industry, while also providing Bachelor of Commerce students with applicable paid experience. Emily Salsbury-Deveaux, who has been consulting for over 17 years, manages the group through recruitment to training to project completion.
Recently featured in Retail Council of Canada‘s publication, Canadian Retailer, SOR|CG is now the longest running and largest of its kind in Canada. It employs 22 Bachelor of Commerce student staff and in its short span of 2.5 years, has completed over 35 projects.
Experienced consultants manage the group, with services being offered at a fraction of the cost of larger firms. Partners of the School of Retailing pay $50/hour for a team of 4-6 student consultants, while non-partners pay $60/hour for a team of 4-6 student consultants. Students also take part in a mentorship program with mentors from around the world who are currently working in the industry.
Canadian footwear brand Shumaker (pronounced ‘shoe maker’) has announced that it will open several locations in 2017, including its first two street-front stores. Shumaker has seen impressive growth since opening its first stores in 2015.
The company was founded in 1948 as a footwear manufacturer and distributor, and is now based in Mississauga. Known for its moderately priced contemporary casual footwear for men and women, Shumaker also boasts wholesale distribution in over 1,600 points of sale across Canada.
Shumaker opened a 1,500 square foot location at Georgetown Marketplace in Georgetown, west of Toronto, on January 12 of this year. The store features an impressive 40 foot frontage, and its lease and design were coordinated in house, according to Shumaker’s Director of Operations, Ishan Singh.
This spring, Shumaker will open its first-ever street-front store at 202 Princess Street (corner of Montreal St. and Princess St.) in downtown Kingston, Ontario. The store will be considerably larger than the company’s other stores, spanning about 3,000 square feet over two levels. The Kingston store “will be in line with our current store designs and branding, but it shall also incorporate a rustic, urban feel,” according to Mr. Singh. Olivier Raoult of FR Capital Realty Advisory Services negotiated the store’s lease, and the store was designed in-house.
Another street-front Shumaker location is also confirmed to be opening this year. Located at 2581 Yonge Street in Toronto (between Eglinton Avenue and Lawrence Avenue), the new store will be on a stretch of Yonge Street that is adjacent to some of the city’s most affluent residential areas, including Lawrence Park. The area also boasts unique and upscale retailers such as L’Occitane En Provence, Drake General Store, Lululemon and Sporting Life. Olivier Raoult of FR Capital Realty, also coordinated that lease deal.
Mr. Singh notes that Shumaker continues to be in discussions with several landlords for locations in Ontario, both within shopping centres as well as urban street-fronts. Mr. Singh says that he is the primary contact for landlords regarding any potential future deals for Shumaker, at this time, and that more locations are expected to be announced in the coming months.
(Photos are of the newly opened Georgetown store, and were provided by Shumaker)
Nestlé-owned Swiss coffee brand Nespresso will expand its Canadian operations this year, by opening its first permanent freestanding location in Western Canada. The company is working with brokerage Oakmont Real Estate Services for its Canadian expansion, which is expected to include several new Nespresso locations yearly.
In March of this year, Nespresso will open a 335 square foot boutique at Vancouver’s Oakridge Centre. The jewel-box-like store will be smaller than most freestanding Nespresso locations, many of which surpass 2,000 square feet in size. While small, Oakridge’s Nespresso will boast a strategic corner location near prestige retailers Tiffany & Co. and Harry Rosen, as per the mall lease plan below. Many retailers do exceptionally high sales at Oakridge, with a new Retail Council of Canada study ranking it as Canada’s second-most productive mall in terms of annual sales per square foot. Nespresso is currently hiring for the new space, and we’ll update this article when we learn of the exact store opening date.
While unconfirmed, sources say that Nespresso’s Oakridge lease may be for a somewhat limited time, while mall landlord Ivanhoé Cambridge solidifies plans for a shopping centre overhaul. Original redevelopment plans are being modified by the landlord, following the discovery of an aquifer below the site.
Nespresso opened its first freestanding location on Montreal’s Rue Crescent in 2009, followed by a spectacular 14,000 square foot Toronto location (designed by Italian firm Goring & Straja) in the fall of 2013, in a former theatre on Yorkville’s Cumberland Street. Both of these are ‘boutique-bars’, according to Brand Manager Caroline Delvaux in an interview last year, with both locations serving food as well as drinks and coffee makers/pods.
Nespresso operates five other freestanding Canadian locations, which are considered ‘mall-based’ boutiques that primarily sell coffee makers and pods. These include stores at CF Sherway Gardens and at Yorkdale Shopping Centre in Toronto, at Place Ste-Foy in Quebec City, at CF Carrefour Laval near Montreal, and at CF Rideau Centre in Ottawa. The new Vancouver Oakridge location will fall under Nespresso’s ‘mall-based’ store classification, as well.
Nespresso also operates shop-in-stores at Hudson’s Bay stores in Montreal (downtown flagship), Toronto (Queen Street flagship, Yorkdale), Vancouver (downtown flagship), Edmonton (Southgate Centre) and in Calgary (CF Chinook Centre). Like the ‘mall-based’ stores, these locations sell coffee makers and pods.
According to representative brokerage Oakmont Real Estates Services’ website, Nespresso is seeking retail spaces in enclosed shopping centres, as well as on high streets, ideally in the 2,000 square foot to 3,000 square foot range. The website also notes that Nespresso may open between two and three stores a year in Canada, as well as between three and six pop-ups annually. Oakmont’s Ben Labrecque (1-514-917-5015) and Iqbal Kamboj (1-514-777-7198) are the broker contacts for the brand in Canada.
Montreal-based POS software provider Lightspeed continues to expand its operations into Canada, as well as internationally. The company’s platform is considered to be the most powerful in the world, and it’s growing quickly as it targets independent businesses with its omnichannel functionality that includes both eCommerce and brick-and-mortar retailers. Lightspeed is ultimately seeking to level the playing field for smaller Canadian retailers as international retailers continue to enter the market, by providing sophisticated technology in an accessible manner.
Over 40,000 businesses are using Lightspeed globally, with numbers growing rapidly. Over $15 billion in transactions in over 100 countries are processed annually using the platform. Lightspeed differentiates itself from competitors like Square and PayPal with its back-office software, and it’s looking to further attract retailers in Canada. The company says that it believes that “small and medium-sized businesses revive our streets by offering something unique that you can’t find in your average chain store.”
The company was founded in 2005 by Dax Dasilva, beginning with four employees working out of a Montreal apartment. Lightspeed has seen remarkable growth in just over a decade, now boasting over 500 staff in eight offices around the world. Originally offering retail POS software only, the company has quickly expanded its offering with a POS for restaurants, an eCommerce platform and an omnichannel selling solution. Lightspeed helps businesses streamline their operations and improve customer service by bringing together inventory, customer management, sales and analytics into a single platform. As a result, retailers gain a competitive edge by managing their brick-and-mortar and online stores from a single platform, helping create a uniform brand experience as well as the ability for shoppers to access the retailer’s site 24 hours/day, seven days/week.
Lightspeed is one of the fastest growing tech companies in Canada, and is backed by Accel Partners, iNovia Capital, Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ). We’ll provide updates on the company’s growth here on Retail Insider, as it’s a Canadian success story worth noting, particularly as it grows rapidly amid fierce competition.
*Partner content. To work with Retail Insider, contact Craig Patterson at craig@retail-insider.com
Upscale Toronto-based tableware and giftware retailer William Ashley is relocating its Manulife Centre store to a new space this year. Its new location will be in what some consider to be Canada’s most prestigious retail address — Morguard’s The Colonnade at 131 Bloor Street West. William Ashley will occupy a temporary ground-level space that will open to the public next month, while the company’s full-sized store is expected to open in about seven to eight months.
William Ashley moved into its current 24,000 square foot 55 Bloor Street West space (with about 20,000 square feet of retail) at the southwest corner of Bloor Street West and Balmuto Street in 1994, replacing former women’s luxury retailer Creeds which went bankrupt in 1991. William Ashley was founded in 1947 by Tillie Abrams (who passed away in 2010), and opened its first Bloor Street store in the 1950’s. In the early 1970’s, William Ashley was the first store in Canada to offer a wedding registry service. William Ashley boasts the largest selection of tableware, giftware, and gourmet kitchenware in the world, and this year marks the 70th anniversary for the venerable retailer.
On February 1 of this year, William Ashley will relocate to a temporary 3,840 square foot retail space at 131 Bloor Street West, in part of the space formerly occupied by Sephora before it recently relocated up the street. The pop-up will operate for several months while a new, spectacular William Ashley is constructed, which will boast 23 foot ceilings, natural light and a new interior to showcase the retailers vast product assortment from some of the world’s top brands.
William Ashley’s new Bloor Street store will span two levels and about 15,000 square feet of retail space. Its ground floor will span about 1,000 square feet, taking over the current lobby space of The Colonnade. Teuscher of Switzerland chocolates, which is housed in the current William Ashley store, will move into part of the new street-level space. William Ashley’s 14,000 square foot second floor will encompass the current second level of the Herzig Eye Institute and adjacent retail, as well as the common area in The Colonnade as per the floor plan below. Natural light will flood the new space from unique oval south-facing windows in the current Eye Institute, while the north side of the store will feature ample exterior light from windows rising up to the floor’s soaring ceilings.
Toronto-based DesignAgency designed the new space, which it describes as having “a series of modern contemporary fixtures, environments and experiences wrapped and woven over two floors through the heart of the landmark Colonnade Building on Bloor Street,” going on to say that its goal is “to create an enveloping environment that is the very definition of William Ashley – all the while allowing the array of stunning products to tell their own unique stories.”
According to William Ashley’s president, Jackie Chiesa, the new Colonnade store will feature enhanced customer service experiences that will include technology, personalized services (including wedding registry, corporate services and interior design) as well as an entirely new store design to showcase William Ashley’s prestigious assortment of goods. There will be a private shopping area for customers who prefer privacy, as well as a ‘venue space’ to host special events.
Scott Harris, General Manager of Retail at Morguard said: “We are thrilled to welcome William Ashley to The Colonnade as part of the new line up of luxury retailers at the iconic building. William Ashley is the perfect complement to The Colonnade, adding the world’s finest Tableware and Home Decor brands to our international assortment,” also mentioning that “the Colonnade was Canada’s first mixed-use building featuring chic retailers. From its opening in 1963 to today, an era of best-in-class retailers continues to serve the demands of Bloor Street shoppers seeking exceptional product.”
William Ashley is vacating its Manulife Centre retail space as part of the shopping centre’s $100 million overhaul, which will see expanded and renovated retail space, new retailers, and the addition of Canada’s first Eataly location on its second level.
We look forward to the opening of the new William Ashley store later this year at The Colonnade, and will provide updates including photos of what is expected to become one of Canada’s most beautiful retail environments. William Ashley will be neighbours with prestigious retailers at The Colonnade including Cartier, Mulberry, Escada, Black Goat Cashmere, Coach, and a substantially expanded Prada, as well as new store locations for Moncler and Christian Dior, both of which will open later this year.
Nordstrom has appointed a new Vice President, Regional Manager for its Canadian operations, and has also announced its sixth Canadian Nordstrom Rack location.
Nordstrom’s new Canadian Vice President will be Michelle Haggard, who most recently held the position of vice-president of Nordstrom’s Southeast division in the United States. She has been with Nordstrom since 1991, rising through the ranks from salesperson in the company’s Riverside, California store, to buyer roles, and eventually helping lead the company’s expansion into Boston. In 2010, she was promoted to Southeast Rack regional manager, which she held until 2013. Nordstrom’s Canadian division will be operated from a new head office in downtown Toronto, with details to follow.
Karen McKibbin has been president of Nordstrom Canada since September of 2012, and will now be president of Nordstrom’s off-price division, Nordstrom Rack. Nordstrom Rack will open its first Canadian stores in the spring of 2018, and as of now has announced six Canadian store locations. Nordstrom Rack’s previously announced Canadian stores include One Bloor Street East in Toronto, Vaughan Mills (north of Toronto), Deerfoot Meadows in Calgary, South Edmonton Common in Edmonton, and at Ottawa Train Yards in Ottawa. The Toronto, Vaughan Mills and Calgary stores will open in the spring of 2018, while the Edmonton and Ottawa locations will open in the fall of 2018.
Nordstrom has also just announced its sixth Canadian store, to be located at Heartland Town Centre in Mississauga. the 35,000 square foot store is scheduled to open in the fall of 2018. Heartland Town Centre is a power centre managed by Orlando Corporation, and features retailers such as Costco, Loblaws, Marshalls, Winners and H&M. Nordstrom has said that it plans to eventually operate between 15 and 20 Nordstrom Rack locations in Canada.
Nordstrom Rack will compete with Saks Fifth Avenue’s off-price concept Saks OFF 5TH, which plans to have 25 Canadian store locations by the end of next year. Saks OFF 5TH has announced 18 Canadian locations so far, with nine of those having opened since March of 2016.
Nordstrom entered the Canadian market in September of 2014 with the opening of a 140,000 square foot store at Calgary’s CF Chinook Centre. A 157,000 square foot Ottawa CF Rideau Centre location followed in March of 2015, along with a 230,000 square foot Vancouver CF Pacific Centre flagship in September of 2015. In September of 2016, Nordstrom opened its first Toronto store at CF Toronto Eaton Centre (220,000 square feet), followed by the October 2016 opening of a 200,000 square foot store at Toronto’s Yorkdale Shopping Centre. On September 15 of this year, Nordstrom will open its third full-line store at Toronto’s CF Sherway Gardens, measuring about 140,000 square feet.
*We amended this article from a previous version, noting Ms. Haggard is a VP, not President.
New York City-based fashion brand Theory is looking to open stores in Canada, after successfully wholesaling at major retailers nationally. Theory has partnered with leading brokerage Aurora Realty Consultants for its Canadian real estate search.
Theory was founded in New York City in 1997 by Andrew Rosen (who is currently Theory’s CEO) and fashion designer Elie Tahari. The fashion brand sells at the ‘contemporary’ price point, featuring modern clothing and accessories for both women and men. Theory is owned by Fast Retailing Co., Ltd. of Japan, which also owns popular Japanese fashion brand Uniqlo — which entered the Canadian market in the fall of 2016 with two stores in Toronto.
Theory has store locations in the United States, France, the UK, China, Hong Kong, Japan and South Korea. In the United States, the retailer operates 22 full-priced stores and 24 outlets. Theory also wholesales in upscale retailers globally. In Canada, Theory fashions can be found in retailers including selected Hudson’s Bay, Saks Fifth Avenue, Nordstrom and Holt Renfrew locations.
Photo: Theory
According to Aurora Realty Consultants’ website, Theory is seeking out retail locations in the 3,000 square foot to 4,000 square foot range, with spaces to be considered both on high streets as well as in enclosed shopping malls. Aurora Realty Consultants President Jeff Berkowitz represents the brand in Canada.
Given the current distribution of the Theory brand in Canada, Toronto is a likely market for at least one Theory store location. Theory has a strong presence at Hudson’s Bay’s Queen Street flagship, as well as in neighbouring Saks Fifth Avenue, at Nordstrom’s two Toronto stores, and in the region’s three Holt Renfrew locations. Vancouver, which also boasts Theory distribution points at Hudson’s Bay, Nordstrom and Holt Renfrew, could be a target city for the brand — Theory’s sleek designs fit well on the body-conscious local population that includes a substantial percentage of fashion-savvy Asians.
Downtown Vancouver is seeing a retail boom of new entrants, and would be a best guess for a location if Theory chooses to open in the city. In Toronto, Theory will likely consider top retail destinations such as Yorkville, CF Toronto Eaton Centre, possibly Queen Street West, and Yorkdale Shopping Centre.
Though some are predicting that 2017 will be a slower year for retail expansion in Canada, there’s still plenty on the way for various regions of the country. In 2016, a number of major international retailers entered the country, and 2017 will see some of these brands expand into various other regions of Canada. As well, a number of new international brands will enter the Canadian market this year, further creating competition for homegrown and other retailers doing business in this country. Industry insiders tell us that this will be a busy year of reporting for Retail Insider, and the following is a discussion of some of the trends that we expect to see for Canadian retail in 2017.
Expanding Recently-Entered International Brands
A number of international brands opened stores in Canada in 2016 and will expand into new markets into 2017 and onwards. Toronto saw the openings of Canada’s first Sandro and Maje locations, with both expected to move into the Vancouver market as early as 2017, as well as possibly Montreal. Trendy NYC-based eyewear retailer Warby Parker opened its first two Canadian stores in Toronto in 2016 (Queen Street West and Yorkdale) and in 2017, it’s expected to expand westward. We’ll also see further expansion of beauty brands in 2017, with new stores for names such as Urban Decay, NYX, Kiehl’s, and a first-to-market fragrance concept that we’ll reveal in a separate article this month.
Two popular Japanese retailers will also be expanding their Canadian store counts. Minimalist Muji, which currently operates three stores in the Greater Toronto Area, will announce its first two Vancouver locations in early 2017, with a goal of operating between 15 and 20 Canadian stores by the year 2020. Fast fashion retailer Uniqlo is also expected to make Canadian store announcements in 2017, and it remains to be seen where they’ll land next (the company says that Vancouver is the likely next target market, as well as further GTA expansion).
An entire essay could be written on expanding international brands alone, so we’ll keep it brief and discuss these throughout the year. We can expect expansion announcements for brands such as Reiss, BonLook, Mackage, Aritzia‘s Babaton, Uno de 50, and various others. Dutch suite retailer Suitsupply will open a large Montreal location next month, and will also announce the location of a Vancouver store this year. Coffee retailer Nespresso will continue opening Canadian store locations, with Vancouver’s Oakridge Centre being its first target for a freestanding store in Western Canada.
A number of entirely new brands will enter Canada in 2017, and we’ll hold off on discussing those in this article so that we may reveal them in individual articles throughout the year. What we will say is that 2017 will be another exciting year for retail in Canada, as international players evaluate the market prior to opening stores.
Grocery
PHOTO: ALDI
Rumour has it that value-priced, super-efficient German grocery retailer Aldi is looking at entering the Canadian market. If so, it stands to disrupt Canadian grocery retailing in a big way, particularly among price-sensitive consumers. Aldi’s floor plates are small and much of its product is private-label, giving it the opportunity to grow quickly into various parts of the country. It’s surprising that Aldi isn’t already in the Canadian market, given that it has had stores in the United States since 1976.
Walmart will continue to make a push into Canada with an expanded grocery assortment, while homegrown Shoppers Drug Mart continues to add expanded food assortments at selected locations. Grocers are also increasingly targeting Canada’s growing downtown cores — a trend particular for central Toronto and Vancouver. What’s resulting is unprecedented competition in the grocery sector, which is partly responsible for challenges that some retailers are seeing, including Sobeys. As well, American retailer Whole Foods appears to have halted its Canadian expansion, if only temporarily, forgoing opening planned stores in Edmonton, Calgary and Toronto. It did, however, open a store in Victoria BC in November of 2016. In 2013, Whole Foods said that it planned to open more than 40 stores in Canada and, at the moment, it only has 12 stores.
Even Sears Canada is getting in on the grocery game, as it is looking to partner with a vendor to open grocery components in some of its stores. It might be a smart move for the retailer, as food purchases are usually more frequent than buying fashion or other hard goods, such as appliances. It also presents challenges for some existing real estate that may require modification for grocery.
‘Hot’ Streets
TORONTO’S WEST QUEEN WEST. PHOTO: CONDO.CA
If it isn’t already, Toronto’s ‘West Queen West’ (Queen Street West between Bathurst Street and the Gladstone Hotel) will establish itself as Canada’s ‘hippest’ retail street this year. Two trendy U.S. brands are set to open their first Canadian locations on the street this year, and we’ll discuss both in separate articles soon. The street recently saw the addition of retailers such as NYC-based eyewear retailer Warby Parker, Detroit’s fashion brand Shinola, Australian skin brand Aesop, and quirky Canadian beauty brand Deciem, among others. Adjacent Ossington Avenue also adds to the area’s hip quotient, with the country’s first Lululemon men’s store joining new entrants including Reigning Champ, Peace Collective and soon, J.J. Wilson’s Ride Cycle Club concept.
We’ll be further diving deeper into Canada’s ‘hottest’ and ‘trendiest streets’ this year in various articles, examining what’s happening in Montreal, which boasts several remarkable high streets (including Laurier Avenue West and Westmount’s Sherbrooke Street West) that continue to add new retailers. Edmonton and Calgary are also seeing new retailers and other amenities opening on Whyte Avenue and 17th Avenue, respectively.
Enhanced Shopping Malls
LUXURY WING AT MISSISSAUGA’S SQUARE ONE
Canada’s top shopping centres will continue to improve, becoming social gathering places as well as entertainment centres. Renovations, expansions and new stores have characterized almost all of Canada’s top malls over the past several years, with momentum expected to move into 2017 and onward. Farla Efros, President of HRC Retail Advisory, says that malls and retailers will continue to add experiential elements to their properties, in order to address increasing competition from brick-and-mortar as well as online retail. Entertainment will increase in some malls as Cineplex-owned The Rec Room announces Canadian shopping centre locations, for example. Canadian shopping centre trends are discussed at length in a newly released study by Retail Council of Canada.
Pop-up and curated retail will be a hot trend for Canadian shopping centres this year, with one major landlord set to announce ‘permanent’ dedicated pop-up areas at several of its properties. Linda Farha, Founder and Chief Connector of pop-up go (an online platform that helps pair retailers with available temporary retail spaces) said, “Customers can expect a growth in ‘permanent’ pop-up store locations with a rotating portfolio in shopping centres and beyond in 2017. Brands and property managers alike are keen to utilize prime, unused leasable space for short-term physical brand interactions, and are taking advantage of the resources available to them to improve their leasing and marketing experience from start to finish. While pop-ups may be for temporary use, the phenomenon is here to stay.”
We’ll be covering various shopping centre expansions and renovations here on Retail Insider for 2017, and will discuss these further in more detail.
Luxury Retail Expansion
A number of luxury brands will expand their operations in Canada in 2017. Chanel’s new 8,700 square foot Toronto flagship, set to open this spring at 98 Yorkville Avenue, will be the latest retailer to open on what’s quickly becoming an important luxury street. Tiffany & Co. will unveil its substantially expanded downtown Vancouver flagship this spring as well, with luxury brands Sefano Ricci and Van Cleef & Arpels set to open nearby in Vancouver’s Alberni Street/Thurlow/West Georgia ‘luxury zone’ corridor. Prada will substantially expand its Bloor Street store in Toronto to become Canada’s largest, and Hermes is about to commence building one of its largest stores, measuring almost 12,000 square feet, at 100 Bloor Street West in Toronto. Bloor Street will continue to see big things when Christian Dior opens a 10,400 square foot store at 131 Bloor Street West this year, making it the brand’s largest store in North America. Moncler will open its second Toronto store this year as well, a few doors down from Dior. We’ll be reporting extensively on luxury retailers as they expand in Canada this year.
Nordstrom Continues Canadian Expansion
Seattle-based Nordstrom has opened six Canadian store locations since September of 2014, and it has confirmed a third Toronto store will open this year. On September 15, 2017, Nordstrom will open a 140,000 square foot store at CF Sherway Gardens in a southward expansion of the popular west Toronto mall. While there are no further confirmed Nordstrom store locations set to open in Canada, the company has said that it could eventually open up to 10 Canadian stores. Speculation has it that a store could eventually open in Edmonton, as well as additional stores in Vancouver and the Greater Toronto Area.
Off-Price Retail Continues Rapid Expansion
One of Canada’s fastest growing retail categories is off-price, dominated by TJX’s Winners and Marshalls nameplates. Saks Fifth Avenue’s off-price Saks OFF 5TH will continue opening Canadian stores in 2017, including 30,000+ square foot stores in various retail formats such as traditional Canadian shopping centres, outlet malls, power centres, and even within existing Hudson’s Bay stores. In early 2018, Nordstrom Rack will open its first Canadian stores, with plans for between 15 and 20 locations towards the end of the decade.
Farla Efros, President of HRC Retail Advisory, says that off-price will continue to expand in Canada, driven by Canadian consumer culture that sees value in these stores, as well as the newness of entrants such as Saks OFF 5TH.
Canada has seen several U.S.-styled outlet malls open over the past several years, with growth continuing into 2017. New centres will include Outlet Collection Winnipeg set to open this spring, as well as the Premium Outlet Collection at Edmonton International Airport, expected to open in late 2017. Existing centres in Vancouver (McArthurGlen Designer Outlets and Tsawwassen Mills) are both set for expansions, while some existing centres in Ontario and Quebec will also see expanded retailers and new concepts. We’ll be reporting on these throughout the year.
Canadians are increasingly shopping online, though not as much as some had expected. Nevertheless, the country will see new e-commerce operations emerge, as well as enhanced websites for retailers such as Holt Renfrew, and innovative e-commerce fulfillment solutions from Hudson’s Bay. Digital disruption will continue into 2017 onwards, as growth in online sales continues to outpace brick-and-mortar.
HRC Retail Advisory President Farla Efros says that e-commerce will continue to see growth in Canada, as it is still relatively underdeveloped compared to that in the United States. Amazon will continue to dominate by continuing to expand into more categories, according to Ms. Efros.
Kyle Tomlin, Senior Director of Education and Events at Retail Council of Canada, discussed how retailers are now understanding the true impacts of omni-channel commerce within their day to day operations. He noted that most Canadian retailers are still working quickly to improve their supply chain logistics by enhancing teams and upgrading systems.
“A growing trend within Canadian retail in 2017 is the continued focus on and improvement of ‘The Last Mile’. The best retailers will provide the widest choice, fastest service, and most convenience within their fulfillment models. Whether it’s click and collect, click and deliver, ultra-fast premium delivery, reserve in store, or bricks & mortar check-out, retailers who offer the highest level of cross-channel convenience will continue to gain market share. Unfortunately, this could lead to some additional volatility in 2017, as retailers who are unable to evolve & improve their Phigital experience & fulfillment promises will continue to find a tough road ahead,” said Mr. Tomlin.
Retail Closures
While there will be plenty of retail expansion for Canada in 2017, there will also be some store closures. HRC Retail Advisory’s Ms. Efros says that she expects more retailers to close their doors, while others that are less competitive will see reduced sales that could see eventual closures in the years to come. She noted teen/tween focused retailers and some department store retailers are particularly at risk. For the purposes of this article, we will hold off naming specific retailers that some are predicting should shutter their Canadian operations in 2017, though American Apparel is an obvious guess as it continues to liquidate its Canadian stores.
Looking Ahead Towards 2018
SAKS FIFTH AVENUE WILL OPEN IN MONTREAL NEXT YEAR. RENDERING: HUDSON’S BAY CO.
2017 will also see preparations for a luxury retail-filled 2018, which will again see major luxury department stores open in this country. So far, Saks Fifth Avenue has confirmed that in early 2018, it will open two stores — a 115,000 square foot location at Calgary’s CF Chinook Centre, and a 200,000 square foot flagship contained within the downtown Montreal Hudson’s Bay building. In Montreal as well, a 220,000 square foot merged Ogilvy/Holt Renfrew is expected to open in 2018, set to fiercely compete with Saks, Harry Rosen and Simons for the city’s limited luxury dollars. Carbonleo, the same developer building the new Ogilvy/Holt’s, is also expected to break ground on a massive $1.7 billion mega-mall in Montreal in early 2018, to be completed in 2021.
We’ll be reporting on these topics in greater detail throughout 2017, as well as forecasting into 2018 and onwards. Although growth may be slower for some retailers doing business in Canada, it will nonetheless be an exciting year for retail in Canada, and we’ll do our best to report on it. If you have any information on retail expansion that we should be reporting on, feel free to contact Craig Patterson at craig@retail-insider.com.
Cineplex-owned “eats & entertainment destination” The Rec Room has announced two more Canadian shopping centre locations, addressing the trend of providing added attractions to retail centres. The Rec Room opened its very first location at Edmonton’s South Edmonton Common in the fall of 2016.
In its most recent announcement, Cineplex confirms that The Rec Room will open a 50,000 square foot space at West Edmonton Mall in the summer of 2017, with construction ongoing. It will become another destination for the already entertainment-focused shopping centre. “On behalf of all of us at West Edmonton Mall, I would like to extend a warm welcome to The Rec Room,” said David Ghermezian, CEO, West Edmonton Mall. “With so much to offer both our local guests and tourists, The Rec Room will be right at home at the most comprehensive retail, hospitality and entertainment complex in the world. It’s another great reason for people to shop, play and stay at West Edmonton Mall.”
In 2018, The Rec Room will open a 36,000 square foot space at London’s CF Masonville Place, which will be part of Cadillac Fairview‘s multimillion dollar expansion and redevelopment project for the shopping centre — which also recently debuted an impressive expansion and renovation that saw the addition of several popular retailers. CF Masonville is one of Canada’s most productive shopping centres, with annual sales per square foot approaching $1,000.
Rendering: The Rec Room
Canada’s top shopping centres are now in the ‘entertainment industry’, adding non-retail amenities to attract and keep shoppers on site. It’s a trend discussed in a new Retail Council of Canada shopping centre study which has just been released, and will be a topic of further discussion here on Retail Insider this month as we delve further in the shopping centre industry.
Both the Edmonton and London Rec Room locations will include the following:
Wood-fired, Canadian-inspired cuisine in a casual dining restaurant as well as ‘eatertainment-style’ dining in the games area,
A bar area where sports fans can grab a drink and catch the game on huge HD screens,
A large attractions area where guests can play over 100 amusement games. Credits earned are tracked on RFID wristbands and can be redeemed at a redemption store for a variety of prizes
Classic favourites like air hockey, pool and ping pong as well as large feature attractions,
A performance space that’s ideal for hosting live entertainment such as musical and comedy acts, and
Multiple private dining rooms appropriate for celebrations, corporate events and parties
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Last year, Cineplex also announced future The Rec Room locations for Toronto’s Roundhouse and at Calgary’s Deerfoot City. The Rec Room is an entertainment centre concept that brings together multiple dining environments, amusement gaming, technology (featuring state-of-the-art simulation) and live entertainment experiences in an auditorium-style space, all under one roof. Cineplex plans to open between 10-15 new locations of The Rec Room over the coming years, each ranging in size from 30,000 to 60,000 square feet and customized to the individual community. The massive, often two-storey entertainment complexes will see half of the space being devoted to dining and live entertainment and the other half being devoted to amusement games and feature attractions.
