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.
Crombie, Executive Managing Director, Retail Services Canada, Cushman & Wakefield, was speaking at a session entitled “A Look at How Trends Today Are Shaping the Future of Retail.”
Crombie has identified the following six retail trends the industry and consumers should watch out for in 2023:
Although we expect to see slight declines in retail sales over the next few years, the Canadian consumer currently remains resilient despite higher interest rates and continues to spend;
Omni-channel is the future of retail whereby retailers will invest in both physical stores and e-commerce to best service its customers on multiple platforms. Also, more retailers will explore and potentially operate in the Metaverse to gain a larger customer base for selling product;
Expect landlords and retailers to both employ greater utilization and investments into technology to better service consumers and drive operational efficiencies;
The retail real estate market is tracking less new construction projects over the next few years, as compared to historic levels, which will likely put upward pressure on rental rates on existing product;
Although we continue to see closures of the traditional department store, expect to see the revival of experiential retail along with more food offerings, services and entertainment venues in our shopping malls which will drive greater customer traffic; and
The suburban retail markets remain strong as consumers support their local retail establishments. However urban retail will continue to struggle until we see a significant return of workers back into the office.
Cushman & Wakefield at ICSC Whistler 2023
Crombie said the Canadian consumer remains resilient.
John Crombie
“In 2022, we were still spending well above 2019, pre-pandemic. So people are pulling out their wallets,” he said. “Holiday spending seemed to be the same as it was the previous year. We are seeing a bit of dip in restaurant spending coming in the new year which is probably not necessarily unexpected.
“I think we’ve been doing well there. That said, we had a huge bounce back in retail spending, retail sales, in 2021 and it’s definitely going to be a little more muted in 2023 but still positive. Projections we had from Moody’s is that year-end 2022 will be 1.8 per cent in terms of sales. Still positive which is good.
“I think retailers have gone through the worst of it through the pandemic. And come recession, it’s taking forever, if any of the real estate assets could survive this better it will be retail because in 2021 and part of 2020 when you’re closed and you’re not making any revenues you had to make some tough decisions. We saw huge levels of store closures. We saw a lot of retailers calling out underperforming sites and so they’ve kind of done a lot of the stuff that traditional companies would do in a recessionary time. Now most retailers and most landlords are in a better position.
“That said, there’s hot spots and not-hot spots. I talk about the suburban market which we continue to see quite strong. And downtown, still with 30 per cent less people in the downtown core that’s affecting the urban retail. So you’ve got a bit of dichotomy happening there.”
Photo: Bayshore Shopping CentreFood Court on the fourth level of The CORE in Calgary. Photo: Jessica Finch
Crombie said he feels bullish about the retail industry.
“It’s just natural that our sales are coming down to a more normalized level,” he said. “We’re definitely seeing pretty little inventory coming on and there’s always a natural growth in population, there’s a natural growth in retail spend, and with very little new inventory coming on there, existing product is going to maintain its value and I think retailers won’t have the opportunity to expand as much because there’s not that new development, not that new shiny tenant. I think that’s going to bolster net rents and everything else.
“We’re definitely seeing less retailers expanding these days but a lot of them dipped into their capital reserves to survive the pandemic. It’s more about the quality of the location than the quantity of the locations. As a retailer, if you weren’t expanding you weren’t a retailer. I say that in jest but they were growing for growing sake. But now I’m seeing more discipline in terms of where they want to be and why they want to be there. So they’re looking at the quality of the locations rather than just ‘I need 10 more sites. I’d rather get five good ones or three good ones’. There’s definitely more of a discipline in the market and we’ll see that going forward for sure.”
Video Interview: What Matters To Today's Consumer in Canada
Vinayak Madappa, Strategic Advisory Partner, Consumer Products, Retail and Distribution for Capgemini, discusses the new What Matters to Today’s Consumer report.
Madappa talks about how consumers are looking for discounts and value, their concerns about their finances, how they are making fewer impulse buys and how they expect big companies to do good in society.
The Video Interview Series by Retail Insider is available on YouTube.
Connect with Mario Toneguzzi, a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and the only Canadian – to learn how you can tell your story, share your message and amplify it to a wide audience. He is Senior News Editor with Retail Insider and owner of Mario Toneguzzi Communications Inc. and can be reached at mdtoneguzzi@gmail.com.
Also check out the other series offered by Retail Insider, including The Weekly podcast and The Interview Series, which are both available on Apple Podcasts, Stitcher, TuneIn, Google Podcasts, or through our dedicated RSS feed for Simplecast and other podcast players.
181-195 Dundas Street West, the row of restaurants potentially slated for demolition. (Image: Zaid Kaddoura)
A rezoning application on Dundas Street West in downtown Toronto threatens to demolish an entire block of decades-old restaurants to make way for a mixed-use, high density condominium tower.
The application was submitted by Dundas Centre Holdings Ltd., and plans to demolish a row of restaurants, from Centre Avenue on the West to Chestnut Street on the East (181-195 Dundas Street West).
Restaurater Syed Rahman, owner of Indian Biriyani House, said his restaurant has been open for 16 years and counting, but that could soon come to an end.
“When I heard about the demolition, I was very shocked and upset,” he said in an interview over the phone.
Indian Biriyani House (Image: Zaid Kaddoura)
Rahman said his restaurant brings life to Dundas Street West. He estimates the block’s restaurants collectively bring in more than a hundred people daily, and that’s on a slow day.
“Our customers are business people, university students, cab drivers and more. Without us, where are they going to go?” he said.
He added many of the other surrounding restaurants, like those on University Avenue, are too expensive for his regulars to visit if the demolition goes through. And like his customers, Rahman believes he and his neighbours will have nowhere else to go. This means they’ll be forced to close their doors – permanently.
“But this restaurant is my family’s only source of income,” he said.
Joseph Chung, assistant manager of Dundas Centre Holdings Ltd., said his family business is struggling, too. He said he understands what his tenants are going through and has their interests at heart.
“COVID hit our clients hard, so we only charged them half of their rent. We’re a small business, so we have more leeway than those giant corporations,” he said in an interview over the phone.
Chung said the row of restaurants are costing him too much and not making enough. In addition, he mentioned his business pays more than $80,000 in taxes annually on a parking lot attached to the block. He believes a mixed-use condo would not only give the business an opportunity to demolish the parking lot, but would also increase revenue.
“As small-time landlords, we have to balance our tenants’ dreams and livelihoods with our own,” he said.
A preliminary rendering of the city block potentially slated for demolition. (Courtesy: Scott Shields Architects)
The greater good?
In addition to alleviating financial pressures on his company, Chung also hopes the condo will help ease Toronto’s housing crisis.
“We’re trying to establish high-density housing, like what we see in Hong Kong,” he said.
A preliminary rendering of the proposed mixed-use, 41-storey condo. (Courtesy: Scott Shields Architects)
Deborah Scott, of Scott Shields Architects, is part of the project. She believes the future condo’s location – a five minute walk from Yonge-Dundas station and a two minute walk from St. Patrick station – means it has the potential to serve thousands of TTC commuters.
“It’s about keeping up with the city’s evolution,” she said in an interview over the phone.
Chung said his organization filed the rezoning application in part because they believe the land could be better used.
“Toronto doesn’t want parking spaces. They want development,” he said.
Scott also believes the condo tower can meet Toronto’s housing needs without sacrificing the street’s commercial potential.
“In New York City, even though the ground floors are so busy, you see lots of restaurants on the second or third floor,” she said.
And Chung added he’s willing to help his tenants secure a spot in the future condo.
“Some of these tenants have been with us for 30 years. We work closely with them,” he said.
Despite this, some of his tenants doubt the condo can maintain the street’s restaurant-heavy retail makeup.
As part of the application, 129.54 square metres (1,400 square feet) of floor space would be allocated for retail. Of that, 72.46 square metres (780 square feet) of this would be placed on the corner of Dundas Street West and Centre Avenue, with the remaining 57.08 square metres (615 square feet) being located further East along Dundas Street.
A preliminary layout of the proposed condo’s ground floor. (Courtesy: Scott Shields Architects)
Rahman anticipates that despite his landlord’s best intentions, the kinds of affordable restaurants characterizing this block of Dundas Street West will be able to afford rent in a new condo podium.
“The students and cab drivers can’t go to these restaurants in the condo towers. And the streets will be empty,” he said.
Timeline? To Be Determined…
Scott estimates the demolition will not be complete for another decade, let alone the construction of the condo.
“At the end of the day, this is all just long-term planning,” she said.
Despite already filing an application with the city in September, Chung said the condo’s details are still tentative.
“For the time being, we’re considering closing down the parking space and turning it into a night market,” he noted.
Despite how far into the future the potential demolition is, Rahman, and his neighbours, are still anxious.
“There is no amount of compensation or consolation that can make up for the loss of my only restaurant,” he said.
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.
Hudson's Bay Londonderry Mall in Edmonton. Photo: Enrique Zenteno
*UPDATE* Hudson’s Bay made the decision in 2023 to keep this store open, albeit in a smaller format and as an outlet concept store. The article below is based on information provided to Retail Insider by Hudson’s Bay at press time.
*****
The Hudson’s Bay department store at Londonderry Mall in Edmonton is closing in August of this year. The store has operated for more than 50 years and was one of the mall’s original tenants.
The 118,000 square foot store has struggled to attract shoppers in the renovated Northeast Edmonton shopping centre — the Hudson’s Bay store hasn’t seen substantial renovations in years other than some minor cosmetic upgrades and a retail downsizing.
Landlord Cushman & Wakefield confirmed the store’s closure and issued a statement for Retail Insider:
“We are disappointed in The Bay’s decision to close its location at Londonderry Mall, however, we are excited about the opportunities this brings to the shopping centre. This is a prime location at the site and we look forward to continuing to work on redevelopment and re-leasing efforts to enhance Londonderry’s offerings to its customers and community.”
Londonderry Mall is owned by Montez Corporation and managed by Cushman & Wakefield.
Click image for interactive Google Map
The Bay provided a statement for Retail Insider for this article. “After careful consideration, Hudson’s Bay has made the decision to close its Londonderry Mall location in August 2023. Hudson’s Bay will continue to serve the communities with a seamless omnichannel experience at our four other Edmonton locations and through thebay.com. While these decisions are difficult they are the right ones for our business, reflecting market changes and our vision for the future. We are committed to treating every associate with respect and fairness through this process, and transfer opportunities will be explored where feasible.”
Londonderry Mall underwent a $130 million transformation that was completed in 2016. That included a full renovation to the shopping centre property that added a La Maison Simons store in 2017. Several retailers have come and gone since then — a large Army & Navy store shut years ago and in 2019, H&M opened a store in the mall near La Maison Simons.
Prior to the renovation in 2015, a consulting group was analyzing sales at Londonderry and found that the Hudson’s Bay store had sales of about $11 million annually — the mall’s Shoppers Drug Mart was seeing sales of about $12 million at the time, which were about the same as the Winners store in the mall prior to its relocation to a larger space. Given the size of the Hudson’s Bay store, its sales at the time were only about $93 a square foot.
The Londonderry Hudson’s Bay was downsized during the pandemic and its configuration was modified. That included adding a central check-out on each floor as opposed to counters in individual departments. At the time of the changes, some Edmontonians had reached out to Retail Insider asking if the store would remain open as it appeared that the changes were part of a downgrade for the retail location.
Level 1 of Londonderry, image via mall website. Level 2 of Londonderry, image via mall website.
When it opened in 1972, Londonderry was Canada’s largest mall west of Toronto, and the only two-level mall in Western Canada. The then 85 store mall was anchored by Eaton’s, The Bay, Woolco, Safeway, and a movie theatre. In 1984, the mall added 65 additional stores and services.
The now 777,000 square foot two-level Londonderry Mall currently houses about 140 retailers with larger anchors including a 100,000 square foot La Maison Simons, the soon-to-close Hudson’s Bay, and last month we reported that a 38,000 square foot No Frills grocery store would be replacing a shuttered Save-on-Foods location. Winners now occupies over 27,000 square feet in the mall.
Prior to the Pandemic, Hudson’s Bay had six stores in the Edmonton area. The downtown Edmonton Hudson’s Bay store shuttered in 2021 and with the closure of the Londonderry store, Hudson’s Bay will soon have just four large-format department stores in the region. That includes stores at Southgate Centre, Kingsway Mall, West Edmonton Mall and St. Albert Centre in the nearby city of St. Albert.
Central check-out at the downsized Londonderry Mall Hudson’s Bay store in 2022. Photo: Christa Patterson Photo: Mike Huibers via Google Images
The closure of Hudson’s Bay will have a significant impact on Londonderry Mall — at the same time, it presents an opportunity to redevelop the space that could include mixed-use. It’s a trend being seen in shopping centres across the country as mall landlords look to diversify properties by also adding density in an effort to create ‘complete communities’. Canada has emerged as a global leader in terms of shopping centre redevelopments and proposals, particularly in the larger Toronto and Vancouver markets.
The opportunities for Londonderry could include non-retail uses for the existing Hudson’s Bay building, which could also be torn down as part of a bigger redevelopment that could see housing and offices added to the site. Landlord Cushman & Wakefield has not yet confirmed what’s planned following the closure of the Londonderry Hudson’s Bay store.
A source in the know told Retail Insider last year that Hudson’s Bay is unlikely to downsize its fleet of stores significantly in the foreseeable future, given opportunities to activate spaces for e-commerce that could include warehousing space as well as points to purchase and pick up items. Co-working spaces and other uses could also come to some Hudson’s Bay stores, not to mention the introduction of 8,000-10,000 square foot Zellers shop-in-stores in some locations.
Image: Londonderry Mall Londonderry from the air. Image: Peterson Group
Since the pandemic, Hudson’s Bay has shut stores in downtown Edmonton, a massive flagship in downtown Winnipeg, and a store at Les Jardins Dorval in Montreal.
Last month we reported that Sophia Hwang-Judiesch had been appointed President of The Bay, following her appointment as President of Hudson’s Bay department stores in September. The Bay division is responsible for shared functions including brand direction, marketing, buying, planning and technology for both The Bay’s online business as well as physical Hudson’s Bay stores. Her January appointment coincided with the retirement of industry veteran Iain Nairn.
In September, Hwang-Judiesch took over the leadership of Hudson’s Bay department stores from Wayne Drummond, who reportedly retired from the Hudson’s Bay Company after almost 34 years. Sources say that Drummond is currently working with Toronto-based Jaytex Group following the exit of Howie Kastner from Jaytex late last year amid disagreements. Jaytex is currently heading the expansion of L.L. Bean in Canada as part of a licensing deal.
Merchandising and getting into the retail part of the business has become an important element for sports teams in recent years.
In an effort to build a brand and a following, teams have followed what typical retailers do to sell products – create an online presence and have a physical presence.
For many teams, that physical presence is usually found at their games with booths and special areas set up for sales. It can also be found in partnerships with sports-minded retailers. And some of the more advanced teams, like the Saskatchewan Roughriders of the Canadian Football League for example, have set up their own standalone retail outlets in places outside of the venues they play.
Sami Jo Small, President of the Toronto Six professional women’s hockey team, said the team has merchandising at every home game from sweatshirts to hoodies to scarves, toques and hats. There’s also jackets and vests, pants and sweats. Every weekend it is creating some new and different merchandise and different T-shirt options for fans.
“Everything we think our fans are going to want to purchase to be able to cheer on the Toronto Six. As well, we have replica jerseys available that are blank or you can get a player’s name on it. And we also have what’s called Shirseys which is a T-shirt version of that jersey with the player’s name and number on the back,” said Small.
“We do in-game sales but we also do online sales as well.”
The team plays in the Premier Hockey Federation with its home rink at York University with a 24-game schedule. There are two teams in Canada (the other one is the Montreal Force) and five teams in the United States. The championship trophy is the Isobel Cup. The season runs from October until the end of March.
Image: T6fanwear.comToronto Six (Image: Lori Bolliger)
Small is a global keynote speaker and three-time Olympian with two gold medals and one silver with Canada’s famous women’s hockey team.
She said the brand currently doesn’t have any partnership with sporting goods stores.
“We’d love to do that. We would love to get the Toronto Six brand and merchandising into more areas,” said Small.
“We actually partner with a company called Real Hip. They’re out of Vancouver and they supply our merchandising for us. So that would be something we would look into for the future to be able to have them sell directly to stores as well.
“We outsource our merchandising to them. Of course with lots of collaboration and back and forth in terms of choosing what will be chosen. But what’s so great about them is they will do the set up and staff the merchandising booth at games for us as it is sort of new for us to be able to have all of this at the games. We have a huge merchandising tent . . . set up with all the Toronto Six branding and logo-ing on it. They also will staff it for us which is really great.”
The Toronto Six has been playing for three years. The name refers to the six boroughs that created the City of Toronto.
Luc Dumont, Vice President of Insights for Leger, said the WOW index is about the different elements that play into an overall impression and perception of consumers’ experience with retailers.
“So what do you get from going to that retailer? What are the different dimensions that play into whether people like going or don’t like going to a retailer?,” said Dumont.
luc dumont
“The model is made up of 16 different dimensions we measure. So things like variety of products. Does the retailer help me make new discoveries? Are the prices competitive? How is the look and feel? How’s the look and feel of the store? Things of that nature.
“And of course a very important element is the staff. So the staff competency. How good they are at dealing with different questions to the products that they sell? How attentive are they to their customers? Whether they’re courteous. Things like that. And a very important part is the store ambiance. How is the store laid out? How is the signage? Is there enough information? What does it feel like to be in the store?”
In 2022, more than 12,000 Ontarians were surveyed to identify the strengths and weaknesses of 148 retailers across 20 sectors. The retailers with a score above 90 are included in the list of retailers that offered the best in-store customer experience in 2022.
WOW Ontario Ranking
1. Saje Natural Wellness (98.9)
2. Lush (97.4)
3. Lee Valley Tools (96.1)
4. Lindt Chocolate Shop (95.1)
5. M&M Food Market (94.1)
6. Yves Rocher (93.3)
7. Nespresso (93.2)
8. NYX (90.9)
9. The Wine Rack (90.0)
In 2022, more than 12,000 Quebecers were surveyed to identify the strengths and weaknesses of 203 retailers across 20 sectors.The retailers with a score above 90 are included in the list of retailers that offered the best in-store customer experience in 2022.
WOW Quebec Ranking
1. Tite Frette (97.0)
2. Yves Rocher (95.1)
3. Shop Santé (94.9)
4. Nespresso (93.4)
5. Claire France (93.2)
6. Mondou (92.6)
7. SAQ (92.4)
8. Doyle (92.3)
9. Bath & Body Works (92.2)
10. Lego (92.1)
11. Popeye’s Supplements (92.0)
12. Lush (91.9)
13. Pitou Minou et Compagnons (91.6)
14. Chocolats Favoris (90.2)
For the 2022 WOW Digital study, nearly 20,000 Canadians were surveyed to evaluate the strengths and weaknesses of more than 200 websites/mobile apps in Canada across more than 25 different sectors.
1. Shop Santé (97.6)
2. SAQ (97.2)
3. Simons (94.1)
4. Nespresso (93.7)
5. Lego (91.7)
6. DAVIDsTEA (90.6)
7. Popeye’s Supplements (89.9)
8. NIKE (88.5)
9. Lush (88.4)
10. Lufa Farms (88.3), Penningtons (88.3)
Saje at Tsawwassen Mills in Delta, BC (Photo: Lee Rivett)
Dumont said the WOW scores have varied over the last couple of years because of forces outside of everyone’s control such as the COVID pandemic. Supply issues have also impacted scores.
“This year we tried to explore in some detail the impact that the labour shortage has had on the retail experience,” he said. “This was a new sort of area of exploration for us this year but we wanted to see how are people feeling about it.
“And very interesting that most people, something like 88 per cent of the people that we spoke to, said that the labour shortage was something that even though they noticed it, they knew it was there, it didn’t really impact their experience with the retailer. For a couple of reasons. One of them being that they felt that retailers had provided solutions to that like more flexible hours, the ability to shop in advance and then pick up in store. But also there was a lot of empathy in the way that consumers are reacting to it. They’re understanding . . . That was a bit of a surprise. We thought it would be much more negative, that people would be much more upset and feel that it had impacted their retail experience in a more negative way which is not the case.”
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 Ordinary on Queen Street West (Image: Dustin Fuhs)
Skincare and beauty brand DECIEM has begun converting the signage of some of its stores, renaming them The Ordinary, after one of the company’s popular brands.
Signage was changed recently from DECIEM to The Ordinary in multiple locations in Canada, including the Distillery District, Queen Street West and Yorkville in Toronto and Metropolis at Metrotown in Burnaby among others.
DECIEM currently operates 38 stores with 11 stores in Canada.
The Canadian stores are located in Vancouver with two and the rest in the Greater Toronto Area. The company just opened a new store in Melbourne, Australia.
The Ordinary in The Distillery District (Image: Dustin Fuhs)The Ordinary at 1240 Bay St in Toronto (Image: Dustin Fuhs)
Nicola Kilner
“When we started the stores, the stores were all branded as DECIEM, which is our parent company,” said Nicola Kilner, CEO and Co-Founder of DECIEM. “Inside the stores they have multiple DECIEM brands. When we launched The Ordinary late 2016 into early 2017, The Ordinary kind of exploded. Customers know The Ordinary but they don’t necessarily know DECIEM.
“So we decided with many of the stores to rebrand these stores to be ‘The Ordinary’ so that we can really bring The Ordinary brand to life more than we could do when it was a shared space with our other brands.”
Kilner said not all DECIEM stores will become The Ordinary but a large portion will as the company moves to a retail strategy of just having one brand in different stores.
“We’re just actually starting a process of kind of redefining our retail strategy because when we first opened the stores back in 2017, 2018 we didn’t have much bricks and mortar distribution. So really our stores were one of the only kind of physical locations that you could go and buy the product because we were largely sold online,” said Kilner.
DECIEM at First Canadian Place (Image: Dustin Fuhs)
“But now here in 2023 especially in Canada we have a huge presence with Sephora. We’re actually their number one skin care brand. Now we’re redefining our retail strategy because the landscape today is actually we have these wonderful stores but we also have wonderful Sephora’s around the corner which also sell the product.
“I think we’re going to redefine the strategy to make sure our stores can become more experiential, tell the brand story in a way that other retail partners can’t and to make sure we can have that difference. We’re just redefining that strategy now and hopefully by kind of spring time we should have more to share on that.”
The Ordinary in The Distillery District (Image: Dustin Fuhs)The Ordinary at Sephora Union Station (Image: Dustin Fuhs)
Kilner said the DECIEM brand is growing.
“There was recently a study saying that when we’re seeing all this coverage of the cost of living crisis, inflation and pressure, consumers are actually looking for value. Value doesn’t always just mean the cheapest. These are scientifically-backed products. So they know that if they spend their money they’re getting value in terms of results and efficacies,” she said.
“And these are things that just really ring true to The Ordinary. I also think when COVID first happened we saw a huge uptick in demand. We’re kind of seeing some lessening now but I think sometimes when these market conditions happen we’re actually a brand that tends to do relatively well in these times.”
She said the company is restarting the incubator engine at DECIEM and it’s hoping there will be two new brands within the next year.
It is also planning to accelerate plans for Avestan and NIOD, two sister brands to The Ordinary from the DECIEM incubator, as well as continuing to support the growth of The Ordinary.
