Retail fundamentals in Edmonton remain resilient despite shifting market dynamics, according to a recent report by commercial real estate firm Avison Young.
Edmonton’s retail market has demonstrated consistent performance over the past three years, signaling a period of ongoing recovery and stability following disruptions caused by the pandemic, said the report.
Key trends:
- Edmonton leads retail spend, driven by rising income and population growth. Consumer spending in the Edmonton region continues to rise on a nominal basis. The city leads Canada in per capita retail expenditures, driven in part by well-paying jobs in the energy sector. As interest rates continue to decline, spending is expected to accelerate. Edmonton remains among the top metro areas for disposable income and housing affordability, positioning it to outperform other major Canadian cities in retail sales growth while continuing to attract interprovincial migrants;
- The rollout of federal–provincial childcare funding has provided relief of up to $30,000 for childcare programs through federal grants; which has fueled quick absorption of the available commercial real estate suitable for conversion. Market dynamics have shifted: there is a growing prevalence of non-profit and preschool-only operators over traditional full-day, forprofit models—especially those requiring outdoor space. From a leasing standpoint, inquiries and leads from traditional childcare tenants have noticeably declined due to provincial grant caps;
- Recent enforcement trends by the Competition Bureau have placed increased scrutiny on exclusivity clauses and restrictive covenants in retail leases. These provisions are now considered presumptively anticompetitive, particularly when they involve broad geographic scope, indefinite terms, or protections favoring dominant tenants—conditions that may substantially lessen competition in local markets. While grocery anchors have been the primary focus, these guidelines apply across all retail sectors, signaling a broader shift in regulatory oversight impacting property controls and leasing strategies.
“Retail vacancy rates have been trending downward from 2021 to 2024, before climbing slightly in 2025 due to new construction deliveries. Demand for physical storefronts have strengthened as the rapid growth of e-commerce begins to level off. Despite challenges stemming from shifts in work patterns, Downtown Edmonton is showing signs of recovery, supported by a growing residential population in the core. The return of workers, students and visitors, along with ongoing development, is expected to further boost retail activity,” said the Avison Young report.
“As of mid-2025, Edmonton has approximately 543,200 square feet (sf) of retail space under construction, representing a 6.91% decline compared to the previous year. Despite this moderation, the city’s retail development pipeline continues to rank among the most stable in major Canadian markets.
“Strong tenant demand, limited space availability, and interest in new developments have driven rental rates upward. While rising unemployment, cautious consumer sentiment, and slower population growth are expected to temper rent growth, projections still point to a steady upward trend through 2026.”
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