The Canadian retail sector continues to show remarkable resilience and growth, despite ongoing economic challenges, according to Trevor Thomas, Executive Vice President at JLL.
Thomas said the strong performance of retail markets across the country, driven by a combination of factors including post-pandemic recovery and a shift in consumer behaviour. Retail sales remain robust, with Canadians continuing to spend on both legacy and new brands, fuelling expansion discussions, particularly in high-demand markets like Vancouver, Calgary, and Toronto.
While retail development across Canada has slowed, mixed-use projects are providing new opportunities for growth. Thomas noted that outside of a few notable developments like Oakridge in Vancouver, most new retail spaces are being integrated into larger mixed-use projects, combining office, residential, and retail components. The demand for space remains high, especially in popular retail categories such as grocery stores, QSRs, and healthcare providers, all contributing to a vibrant retail landscape that is defying the conventional narrative of retail decline.
A significant trend in Canadian retail is the rising demand for “lifestyle centres” – open-air developments that combine retail, dining, and entertainment, commonly seen in the U.S. While Canada has a few examples like Park Royal and Oregon Crossing in Vancouver, the sector remains underdeveloped. Thomas emphasized that as brands continue to seek these types of spaces, Canadian developers are likely to see an increase in such projects, signaling a shift in the types of retail environments consumers want as they return to physical shopping.
“The retail markets continue to show resilience and adaptability post-pandemic,” explained Thomas. “Landlords across the country and all the major cities are doing what they can to enhance connectivity, especially in markets like Calgary and in Toronto.
“Canadians continue to shop. Everybody has a little bit of discretionary income that they’re willing to spend. The Whistler ICSC was a positive one this year. I think a lot of the legacy brands that have been established in Canada for quite some time have had consecutive years of year-over-year growth. And with that spurs the discussions around expansion. But then that begs the question, where can you expand when you have these mature store networks?”
Thomas said the enclosed malls are continuing to see year-over-year growth and surpassing any pre-COVID numbers right now. High streets are doing well too.
“As the population continues to grow, so does the corresponding retail. Grocery stores and your QSR and your healthcare providers, they’re all looking for real estate as well. And for all of those things, you need to go out, get in your car. And then there’s all the ancillary retail that comes with the traffic that those anchors, those retailers bring and people benefit from the foot traffic.”
Thomas said new retail construction is slow across the country with the exception of mixed-use projects where retail is popular at the street level of residential and office towers. The only opportunity to grow is through store closures but that empty space get absorbed very quickly.
“The retail that’s growing and doing well is sort of the perceived value-driven brands within the marketplace. The outlet malls are doing very well, the made-for-factory offerings are continuing to grow and expand. They’re all doing very well. The luxury side of the market has done well, but I’m not blind to the fact that we got some big winds ahead of us and we’ll see if that can continue.”
Thomas said the flavour of the month right now is lifestyle centres. Many brands want to be in them but there just enough of that space to meet the market demand.
“I think we’re going to start to see some of those develop organically through power centres,” he added.
According to JLL’s recent Canadian Commercial Real Estate 2025 Outlook, the retail sector is showing resilience as limited new supply is supporting solid rental growth, with mall sales reaching record levels even when adjusted for inflation.
Key Trends Retail, according to JLL
Strong finish to 2024: Despite overall moderating consumer spending and lower consumer confidence, early indicators point to an increase in holiday sales year-over-year, with a boost in discretionary goods spending. Shoppers delayed purchases to take advantage of GST tax relief on holiday goods and services, with December sales stronger than November’s. Services spending, including entertainment, travel, and dining, regained momentum.
Shoppers favour in-person: JLL Canada’s 2024 Holiday Shopper Survey indicates that more shoppers still prefer to shop in-store instead of online. Shopping centres remain the preferred avenue for holiday purchases, with 74% of respondents choosing this option. Nearly all respondents reported planning to visit shopping centres during the holiday season, with an average dwell time of 66 minutes.
Retail corridors undergo strategic enhancements: Core retail urban corridors, such as Sainte-Catherine Street in Montréal and Stephen Avenue in Calgary, are looking to improve infrastructure to enhance the shopping experience through pedestrianization and transit improvements, according to JLL City Retail Report 2025. While elevating the appeal of Toronto’s Bloor Street.
U.S. tariffs introduce new retail uncertainty: While shoppers are expected to spend more per-capita in 2025, a new downside risk is the U.S. tariffs on Canadian goods and Canada’s retaliatory tariffs on U.S. goods. These measures create an uncertain environment that drives inflation and supply chain disruptions, but also leads to strong calls to buy Canadian goods and near-shore supply chains.
Primaris maintains its acquisition momentum: Primaris REIT continues to pursue the strategic acquisition of shopping centres across the country to boost its sales productivity and portfolio quality. This year, Primaris announced the purchase of 100 percent of Oshawa Centre and 50 percent of Southgate Mall in Edmonton. Previously, Primaris acquired Les Galeries de la Capitale in Québec City, Halifax Shopping Centre, and Conestoga Mall in Waterloo.
