Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
Tel Aviv-based Fox Group is bringing its home furnishings concept Fox Home stores to the Canadian market this year with an initial eight locations. It’s part of a Canadian expansion for the Fox Group that also includes new stores for licensed brands Nike, Mango and Laline.
Fox Home was founded in Israel in 2010 and the retailer says that it offers “a new and fresh concept for the home products market.” Its products are of a “high quality” while offering “value for money,” according to its website in Israel.
The Fox Home stores carry a wide range of smaller home goods that can fit in a footprint of about 4,000 square feet. That includes cookware, kitchen items and tableware such as plates, cups and cutlery, small kitchen appliances, bedding and pillows, rugs, items for the bathroom, decorative accessories, candles and home fragrances, mirrors, and items for home offices.
Photo: Barami LightingPhoto: Barami Lighting
Currently Israel is the only market where Fox Home has a presence, with 90 stores in the country and over 750 employees. Canada appears to be the first international market that Fox Home is expanding into.
As part of the Canadian store expansion, Fox Group will be opening an initial eight Canadian locations for Fox Home this year. All of these stores will be located in the Greater Toronto Area prior to expanding into new markets.
Those eight Fox Home locations include stores at CF Toronto Eaton Centre in Toronto, Yorkdale Shopping Centre in Toronto, CF Sherway Gardens in Toronto, CF Fairview Mall in Toronto, Scarborough Town Centre in Toronto, Vaughan Mills near Toronto, Upper Canada Mall in Newmarket, and at Square One in Mississauga.
Photo: Barami LightingPhoto: Barami Lighting
It appears that Fox Home’s strategy is to operate stores in leading enclosed regional shopping centres, having already chosen some of the top locations in the Greater Toronto Area. That means we may expect Fox Home to open in some of Canada’s leading malls in other regions if the initial launch is successful.
Fox Home will compete with a wide range of home furnishings retailers in Canada. For example, companies such as Ikea are looking to gain market share by opening different sized stores. The list of retailers in Canada carrying home furnishings is extensive, ranging from department stores such as Hudson’s Bay to off-price retailers such as TJX-owned HomeSense. Even smaller Asian concepts such as Miniso and Mumuso will compete with Fox Home in terms of smaller items for the kitchen and home.
In Canada, Fox Group is investing heavily into the market. In 2018 the company launched skincare retail concept Laline, which currently operates nine stores in southern Ontario. The biggest retailer Fox Group is working with in Canada to date is Nike, which includes the opening of a flagship store at Toronto’s Yorkdale Shopping Centre in the summer of 2021 — now plans are in place for flagships to open in downtown Montreal as well as in malls in Edmonton and Calgary. Fox Group is also the licensee for Spanish retailer Mango which just opened its first Canadian store at Toronto’s Yorkdale Shopping Centre.
Photo: Barami Lighting
The entry of Fox Home into the Canadian market signals confidence in physical retail, as international brands look to Canada to open stores.
We’ll follow up on this report when Fox Home opens its first stores, and we’ll also be reporting more on other retail concepts expanding in Canada under the direction of Fox Group.
Nani's Gelato at Yonge & Charles Street in Toronto (Image: Nani's Gelato)
Toronto-based Nani’s Gelato started as a food truck business just before the pandemic and now has three stores in the Greater Toronto Area with plans to franchise the concept for expansion across Canada and into the United States.
“I started Nani’s Gelato as a food truck in the summer of 2019. I started off as a food truck because quite literally at that time real estate was so hot – I mean it’s still hot – but the retail commercial space was so hot pre-pandemic, I couldn’t find a retail space to open up,” said Parry Sohi, the owner of the company.
“I had purchased all of my machines, and all of my equipment without anywhere to put it. So I said I was going to buy a food truck and actually make everything, put it on a food truck and drive around Toronto every single day.”
Nani’s Gelato Liberty Village (Image: Dustin Fuhs)
The first physical store opened on May 31 in 2020 on Charles Street East near Yonge and Bloor. He then opened a location in Mississauga and in recent weeks launched its latest in Liberty Village in Toronto.
Parry Sohi
“We specialize in gelato. We make everything on site at every location, fresh every morning,” said Sohi. “And that’s our sole focus. We do gelato in cups, cones, milk shakes, cookie sandwiches and take-home 500 ml pints. That’s all we do.
“My background is in franchising. I made the decision in kind of early 2022 that we were going to franchise the concept out. The Liberty Village location was our first franchise location. We have another franchisee right now that we’re on the verge of finalizing an actual location with and then we have probably another five franchisees that are just coming on board in the final stages of legal paperwork.
“Ultimately we want to open up about give or take around 40 locations across Canada in the next 24 to 36 months, conservatively.”
The first rollout of stores will be focused on the GTA.
Image: Nani’s Gelato Nani’s Gelato in Mississauga (Image: Nani’s Gelato)
“I sold my last company and it was a franchising company but completely non-food related business. When I sold that I knew I wanted to go into food because I grew up in a food family. My dad operated quick service restaurants when I was growing up. And one of those QSR’s was ice cream. It was a softer ice cream. It’s iconic. It’s still open and operating,” said Sohi.
“But when I was looking at all the concepts I really liked of his, right away I thought of that one because people were always happy when they came. It was quick service. Low retail footprint. We did really high volume in the summers and it kind of gave you a little bit of down time to rest and relax. And in my opinion at that time when I first looked at it, I didn’t think that there had been a lot of evolution in the frozen dessert category.
“I went down to the University of Wisconsin and I took their hard ice cream course. I trained locally with some local gelato classes and then I flew down to the U.S. and trained with an Italian gelato chef there. When I came back I was looking at different frozen dessert categories and I thought gelato was the best because I had flexibility in how I wanted to manipulate the flavours for a more unique product.”
Nani’s Gelato in Mississauga (Image: Nani’s Gelato)Nani’s Gelato in Mississauga (Image: Nani’s Gelato)
Sohi said that while the majority of growth in the future will be through the franchise concept the company remains open to growing its corporate stores as well.
“I love the brand so much. We know that it operates so well. Our ability to take on corporate locations is really easy. For example, if we find a site or a location in a geographic area that we might not have a franchisee ready to go for, we’ll sign the deal, we’ll open the location, we’ll operate because I have a lot of confidence in the brand,” he said.
This may come as a surprise for some Canadians, but our country doesn’t really have a true discount grocery chain. With higher food prices and a growing number of consumers seeking refuge from record-setting food inflation at the grocery store, real discount grocery stores would really come in handy. But the option is simply not there.
In recent years, rebates have grown scarce since No Frills and other value grocers such as Empire’s FreshCo and Metro’s Food Basics took a noticeable step back from their ongoing fight with Walmart. Quebec is even worse as shoppers can find Metro’s Super C or Maxi which is owned and operated by Loblaw. Sobeys doesn’t even operate a discount chain in Quebec. All banners and stores are connected to just a handful of grocers controlling the Canadian market.
Now Walmart is doing its own thing with price locks, and Loblaw just ended its 14-week price freeze which really failed to show beyond a reasonable doubt that consumers were indeed saving money. While consumers likely did save some money in January, after a few months of double-digit food inflation, it was not clear to many.
Rebates are just not as overly aggressive as what you would see in European-based discount stores. Every now and then some approaching threat will shake our industry’s giants and they try to fight for market share. As soon as clouds on the horizon disappear, some sort of truce overwhelms the market. This is what happened with Target’s arrival and quick withdrawal in 2015, and with Amazon Fresh a few years ago, when rumours were swirling that they would attempt to enter the Canadian market.
For years, we have seen reports suggesting that both Lidl and Aldi would enter the Canadian market. They both still have not done so. In fact, Lidl, a German international discount retailer chain, opened its first store in the United States in 2017 and is now operating almost 200 stores. Aldi, also from Germany now has over 2,300 stores in the United States. Both have similar business models, centering all of their efforts on discounts, plain and simple. With both, what you see is what you get, although Aldi does own Trader Joe’s in the U.S.
PHOTO: ALDI
Unlike traditional grocery stores, both Lidl and Aldi operate on a restricted selection strategy, offering only a curated selection of private label products as well as a smaller range of national brands. Lidl may have more branded products, depending on location. This leads to lower overhead costs and allows stores to sell products at lower prices compared to competitors. Moreover, these discount grocers implement cost-saving measures such as a bring-your-own-bag policy, incredibly minimalistic store design, and an efficient checkout process. In fact, in Europe where Aldi and Lidl originate from, clerks typically sit down while working at these discount grocery stores since most of the bagging work is done by customers themselves. That way, rules are implicitly clear for patrons as you walk towards cashiers.
Strategies at Lidl and Aldi not only benefit the consumer with lower prices but also contribute to a more sustainable and efficient retail environment. Some no-frills stores, such as No Frills, do some of that but not nearly at the same level. Lidl and Aldi are also known for their emphasis on quality, offering products that meet strict quality standards while still being affordable.
In recent years, non-traditional grocers like Costco, Dollarama, Giant Tiger and Walmart have slowly shifted and tried to fill the discounting void we have in Canada. Costco though stands out. Only 15 years ago, Costco was a mediocre food retailer, at best. Today, they process many of their fresh products onsite while the quality and freshness rarely disappoint. Deals are impressive, but shoppers need both a car and space at home. And many Canadians are deprived of either.
Interior of Giant Tiger store on Walkley Road in Ottawa. Photo: Giant Tiger
The bottom line is this. Canada needs a disruptor, a new player which will redefine what competition looks like within the grocery industry. Loblaw just converted more than a dozen stores into discount Maxi stores in Quebec, simply because the company is seeing the writing on the proverbial wall. Grocers, coupled with the complacency of our regulars, have gotten comfortable, perhaps too comfortable.
One can only hope that either Aldi, Lidl or another non-Canadian discount grocer reads this column. Canadians are calling you.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
The impact of rising interest rates and inflation, alongside the continued prevalence of working from home in 2022 has become clearer within the commercial real estate sector.
The average Urban Retail Colliers Index Vacancy Rate, currently estimated at 4.0 per cent, is up from 2.5 per cent in its mid-year survey. The highest levels of vacancy are in Central Business District (CBD) locations, Robson (between Thurlow and Bute Streets), Gastown, and Kitsilano, which is highly dependent on UBC students being on campus;
The average Suburban Retail Colliers Index Vacancy Rate is 1.0 per cent, down from 2.3 per cent in its mid-year survey. Tenants looking to locate in suburban areas are exceptionally challenged in finding options. As a result, the focus of demand is projects yet to be constructed, with the recently approved Broadway Plan a key target; and
With the Bank of Canada implementing seven interest rate hikes in 2022 to slow down inflation, the steepest rate of increases since inflation targeting began in the 1990s, retail spending is moderating.
The report said the Vancouver retail sector roared back to life in the first half of 2022 and the sector saw a divergence between urban and suburban locations in the latter half of the year with changes in consumer behaviour. The report also said the difficult toll of pandemic-related challenges forced a few more businesses to close.
Broadway Subway Project (Image: Translink)
Madeleine Nicholls, Senior Managing Director, Brokerage, Vancouver, for Colliers, said the Vancouver retail market has been remarkable with growth in retail sales and substantial growth compared to even prior to the pandemic.
“Retail is doing incredibly well and there’s a lot of retail growth happening particularly in certain sectors like clothing, personal services and the things like that. There’s been a bit of slowing on things like big ticket items,” she said. “When you think of your own life and what happened with those around you, when we went into lockdown and we spent so much time at home, our discerning eye went over the kitchen and thought oh this needs a renovation, oh wouldn’t it be nice to a king-size bed and remodel the landscaping out back. All these big ticket things got done at the beginning of the pandemic. Well, once you’ve done that, once you’ve bought a new bed, you’re good for many years. When you’ve done the landscaping, you’re hopefully good for a couple of decades.
“The steam has come out of those big ticket items because a lot of people who were going to do it have already done it early on in the pandemic. And now too if people are thinking of doing it, they’re appetite for it is stymied by supply chain issues. You try getting yourself a sub zero fridge right now and it takes 18 months to 24 months. That’s just reality. That’s kind of deflating some of the big tickets.
“But people are going back to the office. It’s certainly not 100 per cent. But for those that are or those that are out and about dining out and being seen, there’s an appetite to refresh the wardrobe and that’s what we’re totally seeing. Everyone wants the new fashions and new luggage for all the trips that people are taking. People are refreshing their outfits.”
Louis Vuitton store at the Fairmont Hotel Vancouver — the store is currently being renovated and expanded (Image: Craig Patterson) High Street Vacancy & Median Lease Rates (Image: Colliers / Greater Vancouver Retail Report 2022)
For Vancouver, the return of the tourist has also been a boon for the local retail sector.
“It’s been extremely important. Vancouver being a port city, those cruise ships that come in, I think each one is $2-3 million of revenue directly into Vancouver. So having had that back for a good season last year was monumental,” said Nicholls.
“You can see the restaurants and stores close to the Port were humming. The tourists in Gastown. Gastown did a 180 from being quiet to bustling with bags, and tourist dollars, the gift stores being busy. It’s remarkable to see. It’s incredibly important. If the tourism hadn’t come back the way it had, I think we would have been in an even worse shape downtown. We know the office workers have only come back to about 60 per cent on average when you look broad brush across the thing. Of course, that affects all the food courts and just the general traffic on the street at 12 o’clock on a Wednesday.”
She said the difference between the urban and suburban markets has been remarkable. The growth in the suburban market is also a nod to the fact they are in a hybrid working environment. Even if they are coming back to the office three days a week, that means four days a week they’re actually near their homes. And retail in those areas is benefiting.
Grocery-anchored shopping centre locations, especially those close to dense residential areas and well serviced by transit, have seen an incredible increase in demand, said Colliers, adding that the increase in vacancy in urban high street locations is likely highly correlated to the rising vacancy rates being observed in Vancouver’s downtown office market and stubbornly below pre-pandemic foot traffic levels.
“The amount of people in proximity to a retail location is proving to have the biggest impact on success, said the report.
“While e-commerce has become a permanent part of the retail experience, it has stabilized at a much lower level than the peaks seen during the early parts of the COVID-19 pandemic. Statistics Canada started tracking retail e-commerce sales in 2016, and while it peaked around 11 per cent of total retail sales between March and May of 2020, it is currently hovering around six per cent of total retail sales – in line with projected pre-pandemic growth. This is a strong indicator for bricks and mortar retail as they look to make the most of the need for in-person experiences and the desire to physically interact with wish-list items.”
Colliers said there are great opportunities available for new or growing entrants to Vancouver’s urban retail high streets, especially those offerings with sharply honed customer experience offerings. Vancouver has always been a top destination for ‘First in Canada’ retail locations and experiences, it said.
“While vacancy along urban high streets has risen over the last six months, it remains constrained. A balanced urban retail market, one that provides opportunity for growth, relocation, and new entrants, is in the six-10 per cent range, which is above where Vancouver is today. We have also entered a more balanced period for rents in the latter half of 2022 after strong growth earlier in the year. Expect to see continued strong fundamentals as the retail market recalibrates for a new growth cycle.”
Colliers said options for companies looking to grow or enter the suburban market at grocery-anchored shopping centres are few and far between.
This scarcity of options has driven retailers to focus on new development, particularly in mixed-use developments in destination locations and high-density areas, it added.
Broadway Plan (Image: City of Vancouver Facebook)
Cambie Corridor Plan (Image: Vancouver.ca)
The recently approved Broadway Plan and Cambie Corridor Plan have unlocked a significant number of future development sites in highly desirable locations.
“The long-term outlook for the retail sector and the overall economy is positive, but we are anticipating one to two years of bumpiness in business openings and closures. Generally, rents have held steady for the second half 2022, after significant increases in the first half of 2022, and appear to look stable into the first half of 2023, with some upward pressure on inducements,” said Colliers.
“Growth in business confidence and consumer spending will be highly driven by shrinking inflation. However, it is too soon to say when that inflection point will occur. Once businesses understand the impact of all the interest rate hikes, we will start to see activity resume, but there is not a clear consensus on if we will be done with interest rate hikes soon or not. There is a serious game of wait-and-see taking place, with smaller businesses hoping to follow the lead of larger businesses once decisions start being made again. Expect to see quiet activity levels until more certainty returns to the market.”
Oscar Wylee at CF Richmond Centre (Image: Ritchie Po)
Renowned Australian adult and children’s eyewear brand Oscar Wylee has expanded its Canadian footprint to British Columbia with its first store opening in Richmond.
Oscar Wylee currently has 139 stores worldwide, with eight of these located in Canada.
“Oscar Wylee does research to determine where we believe our products and services will have the most appeal. We typically look for a high foot traffic area with decent population coverage, and we seek areas that are vibrant, popular or up-and-coming,” said Craig Levy, Oscar Wylee’s CEO.
Oscar Wylee at CF Richmond Centre (Image: Ritchie Po)Oscar Wylee at CF Richmond Centre (Image: Ritchie Po)
“Our plans for Canada are bold, and we believe we can bring alternative choice and competitive pricing to the Canadian eyewear market. We have eight stores at present and we could potentially grow to between 20 and 30 in the near future.”
Levy said the company takes in many key factors in making a decision to open a new store.
They include:
Local community – who is the local market we can serve and what are the opportunities and shortfalls in the location today?
Marketing – are we able to educate and bring awareness in the area and what marketing channels are available for OW to market with?
Competition – is their room for us to enter the market and what are the barriers to entry?
Rent affordability – does our model allow for us to pay the desired rent required and will this provide a profitable model?
Optometry and opticians – what is the available pool of skilled health professionals available for OW to offer eye exams and eyewear prescription fulfillment?
Oscar Wylee at CF Richmond Centre (Image: Ritchie Po)
“What sets us apart from other brands is that we bring stylish and trendy frames to the eyewear market without the costs that comes with expensive brand names. Our ongoing price of two pairs from $199 and the hundreds of eyewear styles we offer ensure that anyone can find a frame at Oscar Wylee. We also believe in providing affordable eye care for everyone, which is why we offer eye examinations in all of our stores,” said Levy.
The new BC store opened at CF Richmond Centre, offering a complete optical service with an in-house optometrist, alongside its full offering of over 300 SKUs of premium unique customizable frames and UV protective sunglasses, all handmade for each consumer at an affordable price point.
Image: Oscar Wylee
The Oscar Wylee collection can be viewed online at: www.oscarwylee.ca or at any of Oscar Wylee’s brick-and-mortar locations across Canada including CF Sherway Gardens Mall (Toronto), CF Chinook Centre (Calgary), CF Market Mall (Calgary), West Edmonton Mall (Edmonton), Halifax Shopping Centre (Halifax), Oshawa Centre (Oshawa), CF Markville (Markham) and CF Richmond Centre, BC.
Tony Flanz of Think Retail represents Oscar Wylee in Canada and is negotiating lease deals for the retailer.
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Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past three days.
A new global survey by Salesforce of 5,000 consumers across Canada, Australia, the US, the UK, and Singapore reveals critical changes to consumer spending amid inflation and economic uncertainty.
Key Canadian results include:
Nearly 60 per cent of Canadian consumers say sharing relevant personal information is valuable for an instantly personalized experience with a Retail & Consumer Goods business;
Nearly half of Canadian consumers expect a better experience from retailers as a result of the current economic conditions;
76 per cent of Canadian consumers will remain loyal to companies this next year if they provide better data security; and
78 per cent of Canadian consumers plan to reassess their retail spending over the next 12 months.
Key global results include:
Having a disconnected experience is consumers’ #1 frustration when dealing with organizations;
Consumers are more likely to break up with a brand over poor quality service than high prices; and
Nearly 60 per cent of consumers say communications or offers from a company should have the most-up-to-date information within hours.
Image: Salesforce
Image: Salesforce
Caila Schwartz, Director of Consumer Insights and Strategy for Retail and Consumer Goods for Salesforce, a global leader in Customer Relationship Management, said overall the survey showed that value is incredibly important today for consumers and has driven much of decision making when it comes to spend.
Caila Schwartz
“We saw that across the board from a global level and down through the regions. In particular, we saw discounting strategy really driving demand. What we ended up seeing is retailers holding on to discounts,” she said.
“Over the last couple of years we had really strong demand and really low inventory. So it drove down discounting overall. This year was a little bit different. We didn’t have the same inventory challenges and demand wasn’t as strong. So what we thought we would see is retailers leaning into a very commercial season which is overall what we did end up seeing but when and how they discounted was quite different.
“We anticipated what we had been seeing over the last several years – I want to say maybe even since 2017 or 2016 – was an increase in discounting in those early November weeks . . . That is not what we saw this year. It was very quiet in the first couple of weeks of November and discounting was not as aggressive as it had been in the past in those early weeks. And it wasn’t until Cyber Week when we actually saw promotions kick in. And ultimately that really drove demand. Consumers saw that discounting was really low and they didn’t take the bait. They held back on purchases. And so those early weeks of November, leading up to Cyber Week, we actually saw quite significant declines in online sales and a lot of spend really got pulled back into that Cyber Week period. That’s when we saw the discounts start to rise. That was really driven I think by retailers looking to hold onto margins as much as they could.”
Black Friday Sale at Indigo in First Canadian Place (Image: Dustin Fuhs)
Schwartz said that even before the holiday period starting around the early summer of 2022 more and more consumers were saying that they were only going to buy products that were on sale.
“That was true across all generations, across all income levels. More and more consumers as the year rolled on were becoming price conscious and that ultimately is what ended up shaping what we saw play out,” she said.
“Discretionary spending is definitely down and there’s a focus more on necessities versus those nice to have type goods.”
The global survey found that 81 per cent of consumers say they will reassess their budget over the next 12 months as they seek more personalized experiences. Also, 52 per cent of consumers say poor quality service is the primary reason they won’t make a repeat purchase. And over 60 per cent expect companies to react instantly with up-to-date information when transferred between departments.
It said retail, travel, hospitality, media and entertainment are most at risk as consumers rethink spending.
Image: Salesforce
“Retailers are most at risk. Seventy-nine per cent of consumers say they will reassess their spending with retail brands over the coming year. Travel and hospitality and media and entertainment also face the potential for lowered spend, with 78 per cent and 70 per cent of consumers, respectively, reporting reassessment plans in those sectors,” said Salesforce.
“An economy plagued by inflation and staffing shortages hasn’t lowered consumers’ expectations for top-notch service. Fifty-two per cent, in fact, expect a better experience from their favorite brands as a result of the current economic climate.
“The good news is these same consumers are clear about what they believe makes an improved experience. Seventy-two per cent say they will remain loyal to companies that deliver faster service, and 65 per cent say they will stay loyal if the company offers a more personalized experience.
Consumers also expect brands to use their data to offer more relevant customer services, with over 60 per cent reporting they expect companies to react instantly with the most up-to-date information when transferring across departments. Bolstering trust can also be an opportunity for loyalty; 76 per cent of consumers say that companies that provide data security will encourage their loyalty.”
Vessi at Metropolis at Metrotown (Image: Craig Patterson)
In early January, Salesforce released its 2022 holiday shopping recap, analyzing November and December shopping data from over 1.5 billion shoppers on retail sites using Salesforce Customer 360 (including 24 of the top 30 U.S. online retailers).
While November’s online sales were lower than in 2021 and 2020, Cyber Week deals and Buy Online and Pick Up In Store (BOPIS) offerings helped retailers drive success in 2022. Across the 2022 holiday season, consumers spent a total of $1.14 trillion online globally and $270 billion in the U.S.
“Retailers closed out the 2022 holiday season with stronger online sales growth than expected – driven in large part by U.S. demand, steeper discounts on peak days, and BOPIS options,” said Rob Garf, VP & GM of Retail, Salesforce. “Staggering return numbers show that consumers are still cautious amid economic uncertainty, however.”
