OAKBERRY, Brazil’s number one açai brand and purveyors of 100 per cent natural and always fresh açai bowls and smoothies, is set to open five stores in Vancouver this year with more to come throughout Western Canada.
Carter Friesen
“We are beyond excited to bring OAKBERRY to Vancouver, a city that embraces a wellness mindset and appreciates fresh, nutritious ingredients,” said Carter Friesen, Master Franchisee for Western Canada. “We can’t wait for people to taste this delicious superfood this summer and to see what all the hype is about.”
Friesen, based in Winnipeg, is CEO of Snowbank Capital, the company that is developing OAKBERRY stores across Western Canada.
Image: OAKBERRY
Created in 2016, OAKBERRY is a superfood hub, focused on açaí. With around 600 stores, the chain works within the franchise model and is present in more than 30 countries such as the United States, Brazil, the United Arab Emirates, Saudi Arabia, France, Australia, Peru, Spain, and Portugal. OAKBERRY offers premium açai bowls and smoothies that provide healthy fast food.
“Our focus is almost on developing OAKBERRY here in Western Canada,” said Friesen.
“Many Canadians are probably not familiar with açai. It’s a Brazilian fruit and 90 per cent of it is naturally harvested in the Amazon. It’s not traditionally farmed or produced the way most fruits are these days. This is farmers who own land and have these Euterpe palm trees growing on the land. They send up farmers on ladders to climb up these trees and take the natural açai off.
“Açai is insanely popular in Brazil. It’s the food of choice. I think if you talk to Brazilians they would say it’s probably their most popular food and you can get it on pretty much any street corner across the country as a breakfast food, as a dessert, as a substitute for meals as well.”
The açai pulp from the berry is a natural antioxidant rich in minerals like potassium and calcium, vitamin E, and healthy fatty acids like Omega 6 and 9.
OAKBERRY offers customers the opportunity to create and customize their own açai bowls and smoothies in small, medium and large options.
Oakberry at Sunshine Plaza in Australia (Image: Sunshine Plaza)
OAKBERRY smoothies come with up to three toppings, including fresh fruits like banana, strawberry and blueberries, as well as granola, chia seeds, cacao nibs and more. OAKBERRY bowls will offer unlimited toppings, each layered between delicious açai, creating a flavourful (and highly ‘grammable’) lunch or snack. Customers are encouraged to customize their bowls any way they like to create their very own take on this flavourful and nutritious food.
Vancouver’s first OAKBERRY will open late spring in Kitsilano at 3139 West Broadway. It marks the second western Canadian expansion of the brand, following a store opening in Calgary some time in May.
Additional locations will open in Gastown and Cambie Village. There will also be an OAKBERRY kiosk at The Post building downtown on West Georgia Street, and a signature store is set to open in the West End this summer, just in time for beach season. An additional five stores will open this year and next across Western Canada in Alberta, Saskatchewan and Manitoba.
“They’re going to range from small kiosks where you can take out and go to stores with small seating areas. Generally we won’t have seating for more than 10 people in the stores,” said Friesen.
“We’ve got pretty aggressive plans. We think there’s a real need for a product like this. I don’t know if we can share exactly what our plan is for the number we intend to open but our schedule will be fairly aggressive and we’re going to focus really hard on the lower Mainland and the major metropolitan areas in Western Canada.”
OAKBERRY operates in the GTA under a different master franchise agreement, including locations at Toronto Union Station, Mississauga, and a future location at The Well.
Nordstrom Rack at 1 Bloor Street East in Toronto on May 15, 2023. Photo: Lawrence Cheng
All of Nordstrom Rack’s Canadian stores shut at the end of day on Sunday, marking the end for the chain that saw seven of the off-price stores open in major markets in Canada. Nordstrom Rack’s first stores opened in Canada in 2018.
Nordstrom announced that it was exiting Canada on March 2 of this year, and liquidation sales began on March 18 after court approval. Nordstrom had filed to wind down its Canadian operations under the Companies Creditors’ Arrangement Act.
Since mid-March, Nordstrom’s liquidator has been holding sales at Nordstrom and Nordstrom Rack stores — the initial discounts in March were 5% off most items, drawing criticism and even mocking by some. Sales gradually became deeper until recently when Nordstrom Rack’s stores cleared out quickly with little merchandise being seen on closing day Sunday. Nordstrom’s liquidation efforts are being led by Hilco Merchant Retail Solutions ULC and Gordon Brothers Canada.
Nordstrom Rack at 1 Bloor Street East in Toronto on May 14, 2023. Photo: Lawrence ChengNordstrom Rack at 1 Bloor Street East in Toronto on May 14, 2023. Photo: Lawrence ChengNordstrom Rack at 1 Bloor Street East in Toronto on May 14, 2023. Photo: Lawrence ChengNordstrom Rack at 1 Bloor Street East in Toronto on May 14, 2023. Photo: Lawrence Cheng
When Nordstrom Rack’s stores first opened in Canada, there was excitement around the brand assortment that included an impressive offering of designer shoes, among other categories. The designer offerings appeared to diminish quickly, with many complaining that Nordstrom Rack’s Canadian store lacked interesting product that would have made the stores worth visiting. This was partly due to a shift in strategy by Nordstrom Rack, including in the US. The product assortment at Nordstrom Rack was also said to be somewhat inconsistent when compared to competitors such as TJX Group’s Winners and Marshalls banners in Canada.
Nordstrom Rack opened its first Canadian store in March of 2018 at Vaughan Mills near Toronto. Nordstrom Rack stores subsequently opened at Deerfoot Meadows in Calgary, at Yonge and Bloor in downtown Toronto, at Ottawa Train Yards in Ottawa, South Edmonton Common in Edmonton, Heartland Town Centre in Mississauga, and most recently in September of 2020 at the Willowbrook Shopping Centre in Langley near Vancouver.
The retailer had said in years past that it had planned to operate between 12 and 15 Rack stores in Canada, and store performance as well as the pandemic appear to have halted things. Nordstrom Rack stores are typically in the 30-40,000 square foot range and landlords will be looking to backfill these spaces.
Nordstrom Rack Vaughan Mills. Image supplied by Nordstrom in 2018.
Nordstrom Rack Vaughan Mills, Friday May 12, 2023. Video by Norman Katz Nordstrom Rack South Edmonton Common. Photo: NordstromEXTERIOR OF NORDSTROM RACK AT HEARTLAND TOWN CENTRE. PHOTO: HEARTLAND TOWN CENTRE
The exit of Nordstrom Rack is good news for competitor TJX as well as Saks OFF 5TH, the off-price retailer owned by the Hudson’s Bay Company. Sales at OFF 5TH are also said to be weak with some units seeing sales of less than $100 per square foot, according to sources. It’s not known if Nordstrom Rack’s exit will be a boost to OFF 5TH, which has also seen numerous complaints from shoppers about a generally lacklustre assortment.
Nordstrom’s six full-priced, full-sized stores will remain open in Canada until next month when they, too, will shut forever. That will mark the end of Nordstrom’s run in Canada, which saw the chain lose money in Canada every year since its first store opened at CF Chinook Centre in Calgary in September of 2014.
Following the opening of the Calgary store, Nordstrom opened large full-priced locations in Ottawa (March 2015 at CF Rideau Centre), Vancouver (September 2015 at CF Pacific Centre), and three Toronto locations (CF Toronto Eaton Centre in September of 2016, Yorkdale Shopping Centre in October of 2016, and CF Sherway Gardens in September of 2017).
We’ll report back next month when Nordstrom’s remaining large-format stores shut forever.
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 week.
Recent news in the retail industry has spotlighted the shuffling of big box real estate in the country.
First, retail giant Canadian Tire announced it is expanding its Mark’s store footprint with the acquisition of several real estate leases formerly held by Bed, Bath & Beyond in Canada.
The retail giant announced it was acquiring 10 of those leases for $1.6 million.
Acquiring these leases will enable CTC to continue building on the growth of its Mark’s and Pro Hockey Life (PHL) banners. CTC has designated six of the 10 leases acquired for Mark’s relocations in Grande Prairie, Medicine Hat, Red Deer and Strathcona County (Alberta), Langley (BC), and Oakville (Ontario), it said.
In addition to the Mark’s relocations, the agreement will allow CTC to implement plans for four new Pro Hockey Life (PHL) stores in Ontario. The 10 leases combined represent more than 242,000 square feet of retail space, added the company.
Image: rooms + spaces
Then, Canadian entrepreneur Doug Putman announced he was launching a new Canadian home store brand called rooms + spaces in 21 retail locations formerly occupied by Bed Bath & Beyond and buybuyBABY storefronts.
Putman is acquiring more than 800,000 square feet of real estate and the new stores will open in early summer.
In this video interview, Liza Amlani, Principal/Founder, Retail Strategy Group, and Co-Founder, The Merchant Life, discusses the latest developments.
“It’s what attracts most of us to real estate. It’s a great price,” said Amlani. “I think both parties really got a great deal and I think that was critical for them moving forward on these deals.”
Amlani talks about the reason those spaces were attractive, what might happen to upcoming Nordstrom real estate, the new concept by Putman and the trend towards more shop in shop concepts like Zellers in The Bay.
Amlani said the reason why the leases were scooped up was simple.
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.
Crumbl Cookies in Edmonton at Rabbit Hill Crossing (Image: Crumbl Cookies)
Edmonton-based ZZA Hospitality Group, which operates several Boston Pizza franchises in Alberta, is expanding the gourmet Crumbl Cookies brand in the province.
The company recently opened Canada’s first location in Edmonton at the Rabbit Hill Crossing shopping centre in the southwest part of the city.
Dan Arndt, President of ZZA Hospitality Group, said more locations are coming in the province.
“Crumbl is a franchise out of the U.S. and they have been operating since 2017 and whole concept behind Crumbl is that we only sell cookies. So we have a rotating menu of six gourmet flavours of cookies each week,” said Arndt. “And those flavours rotate out of a catalogue of more than 200 different flavours of cookies. So the whole idea with Crumbl is this rotating menu. Every week we come out with six new cookies and they’re all gourmet flavours, interesting flavour profiles. That’s basically the whole song and dance behind Crumbl.”
First Crumbl Cookies Storefront (Image: Crumbl Cookies)
Cookies are made from scratch and in-house and everything is baked fresh. There is no seating area, just pick up.
Dan Arndt
“Crumbl in the U.S. opened five years ago and I think they just opened their 850th store in the U.S. I don’t know what their plans are for the brand overall in Canada but our group is working to open six locations through Edmonton and beyond.” said Arndt.
“We’re quite keen on the brand. It’s done very well to open and it’s been a good process for us to get this first store open. We are currently under construction on our next site in Airdrie and that’s set to open at the end of June. And then we have an agreement with Crumbl corporate to open four more locations that we’re currently working through real estate on but intend to open more locations in and around Alberta including St. Albert and Red Deer and then other locations.”
He said key real estate locations include busy grocery store areas in shopping centres or other similar anchor tenants like Walmart and Costco. The Freeson Bros. Fresh Market is located at Crumbl’s first site at the Rabbit Hill Crossing in Edmonton.
“There’s a lot of buzz around the brand. They do a lot of things incredibly well. Their social media presence is incredible. They have more followers on Instagram and TikTok than almost any other food provider. It’s crazy. I think they have 6.5 million followers on TikTok which is nuts. At one point, I think that was more than Starbucks and Nike combined. It may still be true today. A couple of months ago I know it was true for sure. Absolutely staggering numbers,” added Arndt. “They have a really strong brand presence.
“On top of that, it naturally appealed to our group. We all have young kids and it was a brand that just intuitively made sense to us. It was the kind of thing that we would be spending our own money. And it made a lot of sense. It felt like there was a real hole in the market for something like this here in Edmonton and in Alberta frankly.”
Image: Crubl Cookies
ZZA Hospitality Group has 11 Boston Pizza franchises – nine in Alberta, one in Whitehorse and one in Yellowknife.
“My dad got into the business 40 years ago this year. We’ve been doing that for a long time,” said Arndt. “That’s our background. We’ve a strong operations piece all through the province with that team looking after our Boston Pizza franchises.
“We had as many as 16 before COVID but we’re currently operating 11.”
Crumbl was founded in 2017 in Logan, Utah by Canadian dual-citizen Jason McGowan, and his cousin, Sawyer Hemsley.
It was love at first bite for Crumbl store owners Daniel, Andy, and Barry Arndt, Megan Moore, and Tamara Reich in Alberta.
Image: Crumble CookiesImage: Crumble Cookies
They said the appeal of Crumbl was obvious; a tech-driven bakery offering a fun, exciting, rotating menu was exactly what they were looking for in their next venture.
“We picked our first location in Rabbit Hill because we know this community well. Having a business in our own backyard also gives us an opportunity to support the local community. As we open our store, we are excited about opportunities to partner with schools and local groups to raise funds and strengthen the community,” the owners said in a statement.
The Colonnade at 131 Bloor Street West (Image: Dustin Fuhs)
Canadian real estate company Morguard Corporation is looking at adding some new high end retailers to two of its jewel properties in downtown Toronto.
Joy Emanuele Rabideau
Joy Emanuele Rabideau, General Manager, Toronto Urban Properties, for Morguard Corporation, based in Mississauga, said the company will be adding high end brands to The Colonnade and to the Holt Renfrew Centre as traffic and office occupancy continues to grow in the downtown following the COVID pandemic.
The Colonnade is the premier Bloor Street address for luxury retailers in Canada and home to Prada, Moncler, William Ashley, Cartier and Christian Dior. In addition, Hermes, Louis Vuitton, Montblanc, Tiffany & Co., Burberry and Gucci are steps away. The shopping complex is 71,479 square feet with 14 stores and services on two levels.
The Colonnade also includes 157 residential suites and three floors of office. It is home to Amal restaurant.
Rabideau said Salvatore Ferragamo will open there this year.
Future Salvatore Ferragamo (Image: Dustin Fuhs)
“And we potentially have another high end retailer to come to that property,” she said.
“We have right now vacant three spaces . . . The Colonnade is right on the south side of Bloor and St. Thomas. It’s in a really high end residential area. It’s really a great spot to be. They used to at one time call it the Mink Mile.”
Cartier at The Colonnade (Image: Dustin Fuhs)OTW at 131 Bloor Street West (Image: Dustin Fuhs)
Rabideau said there have been some retail vacancies in the area along with redevelopment and construction that have presented some challenges.
“But the great thing about the Colonnade is its name and the tenants we have. We have go-to tenants. Even during COVID, Cartier and Christian Dior, they were able to assist their customers. They had curbside pickup. They had people that would just order online. People who would just call them. The brands there are great and the services too.
“These are tenants that really provide high end customer service. They have great management staff. They have good infrastructure in their stores to support their customers. Great outlook and Morguard was a big supporter of all of them during COVID in any way we could assist them.
“The negative is some high end retailers had some fails. Like Escada failed. That was a name brand at one time and they’re no longer part of the Colonnade. COVID was not good to all of them . . . That was a negative for the Colonnade losing that big player but since then we’ve been working with another retailer to try and do another deal. That’s the upside.”
Bloor Street West (Image: Dustin Fuhs)Holt Renfrew Centre (Image: Dustin Fuhs)
The Holt Renfrew Centre is located in the prestigious Bloor-Yorkville area in Toronto. The property is well situated in the axis of the city’s east-west and north-south subway lines and is in close proximity to some of Toronto’s wealthiest areas such as Rosedale and Forest Hill. With over 6.4 million visits a year, the Holt Renfrew Centre’s sales surpass $994 per square foot.
The shopping centre is 274,915 square feet with total square footage of 83,989 square feet for CRU tenants. There are about 40 stores and services in the four-level centre anchored by Holt Renfrew and its 190,926 square feet.
Rabideau said Holt Renfrew is doing very well.
“We have a new deal – I can’t disclose it – that will be taking over the upper level of the former Zara and Fossil space. So our pre-construction (has started) on that space. It’s exciting news,” she said.
“Aritizia is doing very well there. Our lower level of the centre has suffered because of the volume of traffic in the GTA. When I first started this position in January 2022, office occupancy was about 16 per cent. It’s now at 38 per cent on average from Monday to Friday. Tuesday, Wednesday and Thursday are the busiest days for office occupancy.
“We’re doing deals in the lower concourse level and we have tenants like Laura Secord, Tim Hortons, Bell. Our traffic has gone up substantially.”
Holt Renfrew Centre Future Tenant (Image: Dustin Fuhs)
She said traffic for 2023 from January to March has increased by 33 per cent compared with the same period in 2022.
“We have some temp tenants, specialty leasing tenants, that we’ve done in the concourse that are high end retailers which we’ve been fortunate. So we do have some good news. The Flight Centre is doing well with people traveling all over the place. There is some action down there.”
BarBurrito, the largest quick service Tex-Mex restaurant chain in Canada, recently opened its 250th franchise location in the town of Edson, Alberta and then continued right after that with more openings as the brand aggressively rolls out from coast to coast.
Jeff Young, BarBurrito’s Chief Business Development Officer, said with 250-plus stores coast to coast the brand is the market leader as Canada’s largest and fastest growing Mexican food franchise.
“We’ll see another 90 units open this year. We’ve got strong demand for the franchise program not only with new franchisees coming on board but also with existing franchise partners,” he said.
Image: BarBurrito
“We’re also seeing tremendous growth south of the border. In 2020, we opened our first unit in the United States under the brand BurritoBar. So we pivoted on the name because of some trademark restrictions. We now have two units open in Michigan. Construction to start soon for a third location. We’ll be starting construction soon in Delaware.
Jeff Young
“We’ve done a number of single and multi-unit deals throughout the entire United States throughout a number of States, really from coast to coast. What we’re particularly excited about is the interest in our master franchise program and we are in quite advanced conversations with a lot of very sophisticated franchise groups who are interested in becoming our masters with actually quite a number of States and territories throughout the United States.”
The brand currently has 255 locations as of April 24.
Colette MacLean, VP of Marketing, for BarBurrito, said the brand’s first location opened in 2005 in Toronto. The first franchise location opened in 2009.
Colette MacLean
“And from there it was really exponential growth,” she said. “Hit 50 locations in 2017 and then it was 100 in 2019 then 150 in 2021 and the big year was last year when we actually opened 75 locations in 2022,” she said.
“We’re going to hit well over 300 before the end of the year probably.”
MacLean said there are a number of reasons why Canadian consumers love the brand including the freshness of the food and its variety as well as the company’s loyalty program which is unmatched by other brands as to how many times a customer has to visit in order to get some free food.
The franchise, which is comprised of locally-owned and family-operated locations, serves fresh ingredients and offers vegan, keto, and gluten-free options.
Image: BarBurrito
Young said a typical size for a BarBurrito is anywhere from 1,000 square feet to 1,500 square feet with the average about 1,200 square feet.
“We’ve seen particular success with grocery-anchored shopping centres and in particular we’ve seen tremendous success in the smaller communities. Where the Chipotle’s of the world will focus on the major metropolitan areas, we’ve seen very, very good success in tertiary markets, even markets as small as 10,000 population or less,” he said.
Young said real estate decisions are made on strong signage in areas, good accessibility, and good tenancies.
“We want to be in strong retail nodes,” he said. “We do particularly well in the suburban communities where there’s lots of rooftops and I think the fact we do anywhere from 20 to 25 per cent of our business through the delivery aggregators that really lends itself towards that. That’s a particularly important area of our business which also speaks to the fact that traditional malls do not work simply because the delivery aggregators do not service food courts necessarily. What we’ve seen over the last several years is traffic count dwindling in malls.
“So that’s where the suburban, tertiary markets have served really, really well with our brand.”
barBurrito Interior (Image: barBurrito)
Young said the company sees huge opportunity in the Quebec market. It currently has three stores in operation in that province including downtown Montreal.
“It’s a big and important market for us. So we are market ready. We see a lot of upside potential in Quebec, in particular,” he said.
“All the 250-plus stores we have are traditional stores – a traditional in-line part of a shopping centre environment with seating. Where we’re getting a lot of activity and interest in our business is in the non-traditional channels. What I mean by that is the petroleum channel with a (convenience) store component to it, campus settings, airports, hospitals and this is where I see a lot of significant growth in the future in addition to our traditional model.”
MEC at Square One Shopping Centre (Image: Dustin Fuhs)
Recent news of Zellers opening shop-in-shop stores in The Bay has shone a spotlight on an interesting trend in the retail industry.
More big box retailers are creating spaces within their stores to house other brands with a dedicated and branded area. Besides Zellers, other well-known initiatives such as this include Walmart providing space for Sleep Country, MEC in The Bay and Petco in Canadian Tire stores.
“With this continuously changing retail landscape, we expect to see more collaborations as businesses adapt to new consumer preferences and shopping habits. However, the right target audience is crucial for a successful shop-in-shop alignment,” he said.
“Co-branding opportunities are always a good idea, provided that increased brand exposure is in with the right partnerships. If you have a shared or common customer base, that bodes well for both partners. Some lower operational costs can be involved; you are not building out full stores. And obviously, there is the opportunity to test new markets where you may not be sure about your brand’s appeal.”
Canadian Tire and Petco Shop-in-Shop (Image: Canadian Tire)
Minakakis said the host store can attract new customers to a department store with the right shop-in-shop brand.
George Minakakis
“However, it has to be a brand experience that mirrors your or the ambitions of your next customer experience. It is about added value and has to be right; otherwise, you will have wasted space if it isn’t driving revenue. Shop-in shops work best when the host brand offers multiple such experiences in the store. It can work if you tell an aspirational story with these brands. Everyone wins in that kind of environment,” he said.
“I have seen a lot of shop-in-shops globally. The future adoption of this concept is very healthy and will remain a staple diet of retailing. As to where else could we see this concept in the future, it all depends on the creative nature and attraction of the host and how brands want to reach their customers on a lifestyle basis. We could see brand shops around sustainability, health and wellness, artisanal and theatres. On the technology side, there are many opportunities with a Metaverse (one day) and even with gamers. And then, we should ask how does the inclusion of AI and robotics play out in a shop-in-shop environment? Ultimately the focus should be on creating memorable customer experiences because many retailers have been distracted and strayed from the fundamentals of physical retailing.”
Minakakis said typical arrangements for shop-in-shop deals can get a little complicated.
“It all depends on who approached who? If a retailer is approaching a luxury or higher-end premium brand, the terms could be more favourable. Usually, you will find a mix of monthly or annual fees, percentage rent, or a combination. And there are also licensing opportunities where a brand allows its name to be used, and the host themselves operates it. Most higher-end brands will have their own staff to protect their brand. Within this, I would also add an expectation for staffing, training and full-blown customer experience representing the brand,” he said.
MEC at Hudson’s Bay Queen Street (Image: Dustin Fuhs)
“Why? Because we will always have retailers or service providers who have traffic and those that want it – those that have too much space and those looking to expand distribution. The partnership offers retailers a chance to use less than productive space more efficiently and surprise and delight existing customers with new complementary offerings. It also allows partner retailers (the shop within the larger store) to test bricks and mortar concepts to reach potentially new customers. An example is MEC in Hudson’s Bay stores. We are also seeing several digitally native brands use this method to jump to bricks,” he said.
The benefits for the shop-in-shop include lower risk and lower cost exposure to new customers through host shop traffic. It also offers an affordable test of bricks concepts.
For the host retailer, the benefits include enhanced use of low productivity space, bringing in new customers to shop. The idea could surprise and delight existing customers. All could equal more revenue through rent/commission on sales.
Winder said possible places where the concept could be adopted include amusement parks, entertainment venues, sporting events, mass merchandisers, EV charging stations, grocers, airports and more.
“Wherever there is traffic of complementary customers,” he said.
Zellers at Erin Mills Town Centre (Image: Erin Mills Town Centre)
Michael Kehoe
Michael Kehoe, Broker/Owner of Fairfield Commercial Real Estate in Calgary, said the shop within a shop concept is gaining momentum and is a proven formula that has been in practice for generations.
“The shop within a shop format provides retail space opportunities in a very competitive space environment that are typically in urban, high traffic shopping centre venues that are often within a major department store,” he said.
“The shop within a shop can absorb surplus or under-utilized space within the host retailer and can drive consumer footfall to or through the host retailer space.
“Rent structures for a shop within a shop vary, however many are sales performance driven (percentage of sales) along with a payment of a proportionate share of utilities, property taxes and sometimes other operational costs.”
Kehoe said many large format and category dominant consumer space users are in transition and reducing their physical footprint and he believes that the trend will become more widespread.
“The concept is dependent on the host retailer securing a complimentary and compatible co-tenant, think of the large format pet store that adds third-party pet grooming, doggie day care or veterinary services,” he added.
Sleep Country Express at Walmart Canada (Image: Sleep Country)
Stewart Schaefer, President and CEO of Sleep Country, said the experience with Walmart has been “wonderful.” The first store opened within a Walmart in 2021. Today, there are 17 stores. The first 10 stores were 450 square feet. The next seven were 750 square feet.
Stewart Schaefer
“In a given year in our almost 300 stores we get less than two million visitors a year . . . One of the reasons we wanted to be with Walmart that worked well for us is that they get over two million people that go into any given one Walmart on annual basis,” he said
“We strongly believe with half a million people coming into Canada on an annual basis, who knows if they know the Christine Magee (founder) ‘why buy a mattress anywhere else?’ we’ve all been hearing for 29 years. And a lot of the newcomers that come to Canada will go to brands sometimes that they just feel comfortable with and are a bit more international. Like a Walmart. Like an IKEA. We think introducing our brand in these small pop-up stores is also a wonderful lead generator for our big stores. You can transact in these small stores but it definitely has driven a broader customer segmentation to our stores.
“People always think Sleep Country is mid to high end. They don’t realize that our mattresses go from $299 up to $5,000 and the biggest part of our business that we transact is below the $1,000 price point. Being associated with Walmart, gives us a little bit of even more equity that Walmart is all about quality and price and they wouldn’t have partnered up with us if they didn’t think our prices were good and this was a great way of sending that message also subliminally.”
Schaefer said over the next few years the company could potentially be in 100 Walmart stores. The arrangement with Walmart is a combination of a rental fee Sleep Country pays Walmart and a percentage of sales.
Sleep Country Express at Walmart Canada (Image: Sleep Country Canada)
In a statement, Stephanie Fusco, Senior Manager, Corporate Affairs of Walmart Canada, said the chain is focused on becoming a modern retailer that provides customers with access to a broad ecosystem of products and services when they choose to shop there.
Stephanie Fusco
“As part of this initiative, we’re exploring different ways to collaborate with brands in-store and online to provide our customers with even more choice. In some cases, you’ll see these brands in a dedicated area on the sales floor, in a licensed space along the edges of a Walmart Canada store or, digitally, in our online Marketplace,” she said.
“Customers who shop with Walmart Canada will experience both our license program that includes “store in a store” concepts and an online Marketplace that allows brands to sell directly to our customers.”
For example:
When customers shop in-store, they’re able to access brands and services such as Sleep Country, Wine Rack, The UPS Store, Regal Nails and SmartStyle hair salons.
Walmart Canada has several restaurant offerings, including McDonald’s.
With continued focus on healthcare, Walmart Canada has over 75 Jack Nathan Health medical clinics in store.
For customers shopping online through its Marketplace offering, they’ll see an assortment from top brands like General Electric, Claire’s, Pajar, As Seen on TV and Zwilling.
“Along with providing more choice to our customers, this approach allows brands and services to go beyond their traditional reach and sell directly to or engage directly with our Walmart Canada customers,” added Fusco.
Retail giant adidas is rolling out its newest store concept The Pulse for value seeking consumers in Canada with four locations coming to the retail landscape this year.
“Like the heartbeat of the sporting community, welcome to Pulse,” said Lesley Hawkins, VP of retail for adidas Canada. “It’s going to offer an elevated experience with commercial products along with a focus on activation and promotion. It will be our premium factory outlet concept for the foreseeable future.”
Mirabel Landing Zone (Rendering: adidas)
Hawkins confirmed the following adidas stores in Canada are being launched in the new The Pulse concept:
Montreal Premium Outlet, Mirabel QC – existing 6,000 SF Premium Factory outlet store will be expanded to 8,000 SF and moved to the new Pulse concept – June 30;
Toronto Premium Outlet, Halton Hills ON – existing 5,100 SF Premium Factory outlet store will be expanded to over 9,000 SF and moved to the new Pulse concept – November 16;
CrossIron Mills, Calgary AB – existing Brand store will be over doubling in size to just under 10,000 SF and moved to a Premium Factory outlet with Pulse concept – November 16; and
Dartmouth Crossing, Nova Scotia – a completely new Premium Factory Outlet store opening October 1.
Hawkins said adidas is opening an over 10,000-square-foot Pulse in Dartmouth. The retailer currently doesn’t have any presence east of Montreal.
“We’re really excited to enter the Atlantic provinces and particularly into Nova Scotia,” said Hawkins.
Mirabel Fitting Rooms (Rendering: adidas)
Lesley Hawkins
The new Pulse concept will include both full-service and self-service areas.
“The value consumer has very different shopping styles. Not everybody wants self-service, so we’re really trying to make sure that we adjust our shopping experience to match the demands of the changing consumer,” said Hawkins.
“A lot of what you’ll see in the design elements are a little bit more premium finishes that we would have had . The addition of some modular fixtures that are really quite flexible, so as new collections drop, as we find products that are of higher demand, there’s high capacity fixtures to meet that demand. So it’s really that elevated experience with a commercial product offering.
“We haven’t yet rolled out our plans for 2024 and 2025. But as we continue to grow our Factory Outlet fleet or renovate existing doors, it will all be within The Pulse concept. It will continue to be for the foreseeable future for the value consumer.
Granville adidas Facade (Rendering: adidas)
In addition to the introduction of the Pulse concept, adidas is also introducing their next generation concept for the Originals brand – The Collection.
“The Collection is our next generation of concept for the Originals. With The Collection, that’s really the space that curates the moment, captures the culture, sort of talks about the past combined with our future vision,” said Hawkins.
Granville adidas Sales Floor (Rendering: adidas)
She said the existing 3,000 SF Granville Street Originals store in Vancouver is expanding to 5,000 SF and moving to the new Collection concept as of July 21. In addition, a new 5,800 SF Originals store will open August 18 at The Well, a massive mixed use development in downtown Toronto.
“In our key city of Toronto and key city of Vancouver, both of them will have a larger Originals presence with the new Collection,” said Hawkins.
Since Covid-19, Jennifer Thomas, the Senior Director of National Speciality Leasing with Morguard, has seen a demand for short-term leasing for brands and she does not see the trend winding down. Thomas talks about the future of speciality leasing in Canada, how we compare to other countries, and what makes a pop-up successful.
Jennifer Thomas
“After the pandemic, we saw an incredible surge of inquiries for pop-up space coming from specialty retailers, local retailers, and national brands – it was more interest than we had experienced in a number of years,” says Thomas. “We went from having vacancy concerns to quickly having limited space in some centres, as we found that pop-ups were the solution for many brands coming out of the pandemic. I believe we are going to continue to see strong demand for pop-ups in 2023 in Canada and we are also going to see an increase in brands offering more interactive experiences to drive traffic.”
In the past Thomas said pop-ups were used for experimentation with new locations before brands committed to a long-term lease, but since the pandemic she has seen a push to support local and pop-ups became a great way to bring local brands into shopping centres. As smaller businesses were impacted more because of the lockdown, Thomas said local brands have been looking for a new way to showcase their products and she has seen a surge of small businesses interested in specialty leasing because of this. Thomas has also seen an increase of online brands using the same concept.
Smash + Tess at Coquitlam Centre (Photo: Smash + Tess)Smash + Tess at Coquitlam Centre (Photo: Smash + Tess)
“Online companies started looking for locations because they wanted to merge their online presence with a physical store. Brands that were traditionally online were now altering their business strategy by coming to us to experiment with short term leasing. They saw value in offering traditional face to face services, being able to fulfill orders in-store and increasing their brand awareness – it caught us off guard because after a strong surge in online sales during the pandemic, we were pleasantly surprised that these retailers were recognizing the value of having a physical location in addition to their online presence.”
A traditional store Thomas says is usually up for around three months or less, but varies with each brand, but she is also seeing an increased amount of brands staying longer compared to before the pandemic.
Why is Canada Specialty Leasing Different?
When comparing Canadian pop-ups to other countries, such as in Europe or Asia, consumers might notice the difference and wonder why we don’t have the same experiences. For instance, Balenciaga’s pop-up in London has pink fuzzy interiors, Adidas store in Spain is created to look like a shoe box, Tiffany & Co opened a short-term store in Los Angeles and is designed as its blue gift box, Dior’s pop-up in NYC is designed as a perfume bottle, and Polestar opened its first specialty store in Finland and the building was made out of snow and ice.
There also have been instances where luxury brands, such as Louis Vuitton and Dior, have used handbags as a design for its storefronts. We have also seen several brands use digital storefronts to increase consumer engagement – so why are we not seeing this creativity in Canada?
Thomas says pop-ups internationally are designed to be “visually striking, Instagram worthy, and to drive traffic” and says this happens in Canada as well, but on a smaller scale due to the lack of budget. She also suggested some brands in Canada look at specialty leasing as only a revenue generation and not as a marketing tool – and “it needs to be both.”
“International pop-ups benefit from large marketing budgets and grand installations, which we traditionally don’t see in Canada. There seems to be a different focus on budget here, which makes it challenging for our brands to compete with international ones. We also don’t have the urban density in Canada that they do overseas and that is why we see these elaborate experiences internationally versus here such as a giant purse pop-up, or brands using AI to create amazing spaces – but this doesn’t mean we can’t be successful here.”
The Specialty Leasing Potential
Daniel’s Chai Bar at Bramalea City Centre (Image: Jonathan Lewis / Jonathan Productions)Hilary MacMillan Pop-up at The Colannade
Thomas says even with a small budget, the key for pop-ups to be successful is to be more interactive.
“They need to focus on creating unique and engaging experiences for shoppers. Pop-ups have evolved now to create more of an opportunity for shoppers and provide them with unique offerings and new experiences, and it is going to continue to be trendy going forward. Brands need to create something that consumers will associate with the brand, create a memory, and get the consumer involved.”
Thomas suggests brands create artistic components or a photo wall for consumers to share their experience on Instagram. One pop-up concept she mentioned was Pick-Me-Up by MilkUP, a pop-up shop in Toronto in 2021 where instead of paying with money, consumers would pay with a social media post. This is one example how the brand was actively engaging with consumers and using the concept as an interactive marketing tool. Thomas said this is one trend, paying with media posts, is becoming popular. Thomas also recommends brands to create a personalized or memorable experience in Pop-Ups.
Nudestix Pop-up at The Holt Renfrew Centre (Image: Morguard)Nudestix Pop-up at The Holt Renfrew Centre (Image: Morguard)
Pop-ups failures are usually because the brand fails to provide a unique consumer experience, are too fast establishing a viable business model, are in the wrong location, or over-stay their welcome.
“Brands can sometimes get excited and they open for too long. We all know that pop-ups create this sense of excitement and urgency and sometimes that gets diluted. If a brand pops up for too long in a shopping centre, they overstay their welcome. So we have seen a lot of success for brands that pop in and pop out. They know the duration and know when the novelty wears off, then it is time to move onto the next location.”
As pop-ups continue to be a popular trend in Canada, Thomas recommends brands to make sure they have a strong marketing plan, right location, right products, and always have an interactive component for consumers. Just because we can’t compete with international speciality leasing does not mean we can’t use the same ideas but on a smaller scale.
