Canada’s retail sector continues to navigate economic uncertainty, affordability challenges and rapid technological change heading into 2026, according to George Minakakis, founder and CEO of the Inception Retail Group.
Minakakis said 2025 was a largely flat year for retail, with performance varying widely by segment. Consumer demand fluctuated and results lacked consistency, leaving many retailers focused on simply weathering the year without major setbacks. He noted that retailers who avoided aggressive discounting and protected their value proposition were often better positioned, as excessive promotions can weaken brand equity.
Looking ahead, Minakakis said many of the same pressures remain in place. Affordability continues to weigh on consumers as food prices stay high and a significant portion of Canadian mortgages come up for renewal, potentially at much higher interest rates than five years ago. Trade uncertainty and geopolitical tensions are also contributing to a cautious economic outlook.
Minakakis highlighted artificial intelligence as one of the most significant forces reshaping retail. AI is being adopted quickly by both retailers and consumers, fundamentally changing how products are discovered and purchased. As AI-driven tools increasingly guide consumer choices, retailers face growing challenges around visibility and relevance in digital and AI-powered marketplaces.
According to Minakakis, retailers that are thriving are those that have embraced transformation rather than becoming immobilized by uncertainty. He pointed to major retailers that have consistently adapted their operations and technology strategies over time as examples of how ongoing evolution supports long-term resilience.
On the real estate front, Minakakis said the collapse of Hudson’s Bay has left a large amount of oversized retail space across Canada. He expects landlords to subdivide many of these locations, as finding single tenants for such large footprints will be difficult, while malls will need to focus more heavily on driving traffic.
For mid-sized retailers, Minakakis said the most critical near-term decision is clearly defining how AI will be integrated into their business, with speed and responsiveness emerging as key competitive advantages.
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