A recent report by commercial real estate firm Colliers indicates foot traffic in Canada is rising for most merchants, both month-over-month and since the beginning of 2024.
Adam Jacobs, Head of Research (Canada) for Colliers, said as the higher cost of living and inflation weigh on consumers, some sectors like low-cost mass market retailers are poised to benefit.
“Not unlike office, you see a lot of negative stories about retail but to me the data says that the story of the last couple of years is that there’s been a huge boom in population, a huge boom in immigration, millions of people moving to Canada and you can really see that in the day to day. Canadian Tire, No Frills grocery store, A&W. Your day to day stuff that kind of everybody needs,” said Jacobs. “There’s quite a lot of growth there. So I think people might be surprised to hear that because you hear that ecommerce is taking over, that people are broke because of inflation and everything.
“And to be clear this doesn’t say anything about how much money they’re spending or are they spending more than they did five years ago. If we’re just looking at the number of people who walk through the front door, that number is up for most normal retailers like grocery, fast food, large format, Walmart, Superstore. A lot of that I think is just attributable to how quickly the country is growing and the fact that everybody needs a pair of socks and groceries.
“I think that’s an optimistic story if you’re on the leasing side or the landlord side to counter balance some of the negativity.”
Here are the report’s key findings:
- Home improvement season is upon us, with huge growth in traffic for large-format general retailers like Walmart and Canadian Tire – often the go-to places for garden supplies, tools and outdoor furniture;
- New Year’s resolutions have worn off, and the weather is improving, which means traffic for many fitness chains is down considerably. While traffic is up for most categories, it’s down double-digits for major gyms like LA Fitness and Planet Fitness;
- Record-high population growth has been the story of the last several years, and it’s reflected in foot traffic across the board. Daily essentials like bank branches, grocery stores and coffee shops are seeing strong growth; and
- Quick-service restaurants (QSRs) were resilient throughout the pandemic and the ensuing inflationary environment post-COVID. We’re still seeing growth for fast food chains like A&W and Subway, partly driven by new store openings in a strong retail leasing environment.
Colliers uses data firm Environics Analytics’ Footfall tool to see who’s up, who’s down, and where growth is happening in Canadian retail.
Here’s Colliers’ outlook for the rest of 2024:
- Record-high population seems likely to tail off with tighter restrictions on temporary residents – this may lead to a slowdown in foot traffic overall;
- Some sectors are seasonal – gyms, for example – and will see improvement with cooler weather later in the year; and
- A weakening labour market may lead to slower gains for discretionary spending.
View the Colliers Canadian Retailer Foot Traffic Analysis for May 2024
