Canada’s retail labour market is showing signs of improvement after a difficult start to 2026, although the recovery is unfolding unevenly across jobs, categories and markets.
Statistics Canada reported that employment in wholesale and retail trade increased by approximately 21,100 jobs in July, a gain of 0.7% from June. That followed an increase of about 16,400 jobs in June, meaning the combined sector added roughly 37,500 positions over two months. Despite those gains, wholesale and retail employment remained approximately 50,100 jobs below July 2025 levels, representing a year-over-year decline of 1.7%.
The figures point to a labour market that has begun regaining some of the ground lost earlier in the year. For retailers themselves, however, the headline numbers capture only part of what is happening.
Suzanne Sears, president of Best Retail Careers International, said the hiring activity she is seeing is heavily concentrated at store level rather than across the full retail organization.
“The demand is almost entirely street level, with an emphasis in hiring multiple part-time workers,” Sears said.
Her observations point to a Canadian retail employment market in which companies continue to need frontline workers while remaining considerably more cautious about higher-level hiring, compensation and permanent headcount.
Retail Employment Shows Signs of Recovery
The Labour Force Survey combines wholesale and retail trade in its headline industry figures, meaning July’s 21,100-job increase cannot be attributed entirely to retailers. More detailed Statistics Canada payroll data, however, indicates that retail employment itself had already begun moving higher earlier in the year.
Retail payroll employment increased by about 5,600 positions in May, marking a third consecutive monthly increase. From March through May, the sector added approximately 20,500 payroll jobs, or about 1.0%.
The improvement followed a longer period of weakness. Retail payroll employment had declined through portions of 2024 and 2025, while several major retail categories remained below year-earlier employment levels during the first part of 2026. The recent gains therefore look less like a sudden hiring boom than an emerging recovery from a period of contraction.
Retail also remains an important employer of younger Canadians. Statistics Canada reported that close to one-quarter of returning students who were employed during the summer worked in retail trade, making it the largest employing industry for that group. The sector’s workforce composition helps explain how rising retail employment can coexist with continued caution around more senior, permanent and corporate hiring.
Hiring Demand Concentrated at Store Level
Sears said employers are seeking staff most actively in customer-facing positions, often with a preference for multiple part-time employees rather than fewer full-time hires. An increase in retail employment, therefore, does not necessarily signal a corresponding increase in career-track positions, head-office roles or management opportunities.
Within store-level hiring, some categories are considerably more active than others. Sears said cosmetics and beauty currently represent one of the strongest areas of recruitment demand and one where employers are having difficulty finding sufficient qualified staff. She also pointed to luxury retail, watches and jewellery, and luxury menswear as areas where demand for experienced employees remains strong.
Those segments can require specialized selling skills, including product knowledge, clienteling ability and experience providing highly personalized service. In luxury retail in particular, established customer relationships can carry considerable value. A relatively large pool of available workers, as a result, does not necessarily mean employers can readily find candidates with the particular experience they are seeking.
Retail Pay Is Rising, but Compensation Remains a Challenge
Average weekly earnings in retail trade reached approximately $798 in May 2026, up more than 8% from about $739 a year earlier. The increase is significant, although retail earnings remain substantially below the Canadian economy-wide average of approximately $1,338 per week.
Sears said many employers are discovering that compensation budgets established even a year ago are no longer sufficient to recruit the calibre of employees they are seeking.
“It is nearly impossible to attract high-level talent with last year’s wage budgets,” Sears said.
In some cases, she said, companies are leaving positions vacant rather than increasing compensation enough to attract their preferred candidates. In others, they may ultimately hire someone with less experience than originally envisioned for the role.
Retail compensation is rising relatively quickly from a comparatively low base, while candidate expectations and employers’ requirements for experienced talent are not necessarily moving in tandem. The disconnect can become more pronounced as retailers move beyond hourly sales positions into management, regional leadership and specialized roles.
Career Progression Adds Another Recruitment Challenge
For experienced candidates, Sears said compensation is only one consideration. Advancement opportunities are also influencing how candidates assess retail careers, and the Canadian operations of international retailers do not always offer the same range of corporate positions available in their home markets.
International retailers operating Canadian store networks may keep key merchandising, buying, marketing, strategy and executive functions at headquarters outside the country. That can narrow the domestic career ladder for employees seeking to progress beyond store and regional management.
Sears said the combination of compensation expectations and limited opportunities to move upward can make it harder to attract and retain strong retail employees. For workers deciding whether retail represents a long-term career rather than simply their next job, the availability of a credible path forward can become an important part of the decision. For employers, it can create a mismatch between the experience they expect candidates to bring and the compensation and career opportunities available in return.
Hudson’s Bay Closures Added Thousands of Workers to the Market
The collapse of Hudson’s Bay added another unusual dimension to the Canadian retail employment landscape. Thousands of employees were displaced as stores closed across the country, suddenly putting a significant pool of experienced retail workers into the labour market.
One might expect that influx of talent to make recruiting substantially easier for other retailers, but Sears said that has not necessarily been the case. In her experience, cosmetics employees coming out of Hudson’s Bay have generally been more readily absorbed by other retailers, while many other former employees have either retired or have not yet moved into comparable positions.
The situation illustrates a notable contradiction in the current labour market. Retailers can report difficulty finding qualified employees at the same time that experienced retail workers are looking for work. The challenge is not necessarily the absolute number of people available, but how closely candidates’ experience, compensation expectations, location and skills align with the positions retailers are trying to fill.
Retail Hiring Extends Into Smaller Markets
Where retailers are hiring is changing as well. Sears said some of the activity she is seeing is connected to expansion into smaller provinces and communities that have historically been underserved by national retailers.
Recent employment data provides some support for that observation. Wholesale and retail trade employment in rural and small-town Canada was up by approximately 13,600 jobs, or 3.7%, year over year in June, with even stronger growth recorded during some preceding months.
Population shifts, housing affordability and development in secondary communities are creating opportunities outside Canada’s largest metropolitan markets. Communities that historically supported fewer national retailers can become viable locations as their populations grow and surrounding trade areas expand.
For retailers, expansion into smaller and underserved markets can also create a recruitment challenge. New stores require local employees, including managers and experienced sales staff, in communities where the existing pool of specialized retail talent may be smaller. Growth in these markets can therefore create jobs while simultaneously making certain positions difficult to fill.
Tariff Uncertainty Weighed on Hiring Earlier in 2026
Asked what contributed to the weakness in retail hiring earlier this year, Sears summarized the mood among employers in one word: “Paralysis.”
She pointed specifically to uncertainty surrounding U.S. tariffs and concern over how changing trade relationships could affect costs, consumer spending and broader economic conditions.
Her assessment is consistent with broader business sentiment reported earlier in the year. Bank of Canada surveys found that tariff uncertainty and softer demand were weighing on companies’ expansion and employment intentions, with many businesses reluctant to increase staffing while the economic outlook remained unclear. Statistics Canada had also reported that employment in wholesale and retail trade was trending lower from late 2025 before the more recent improvement.
The retail employment decline cannot be attributed to tariffs alone, but uncertainty around trade policy formed part of a broader environment in which businesses had reason to delay decisions, limit hiring and preserve flexibility until there was greater visibility around demand and costs.
Holiday Hiring Could Remain Constrained
Two consecutive months of improving wholesale and retail employment might ordinarily suggest stronger hiring heading into the fall and holiday season, but Sears remains cautious about the outlook.
She said many retailers have limited wage budgets available for substantial additional hiring, even as the industry approaches its critical seasonal period. Retailers will still require holiday staff, particularly in malls and other high-traffic environments, but they may have to be more selective about how those labour dollars are deployed.
That could mean greater reliance on part-time and seasonal workers, adjusting hours among existing employees or limiting permanent additions while reserving available labour budgets for periods of peak demand. The fall hiring market could therefore appear active at store level while remaining restrained elsewhere within retail organizations.
HR Departments Face Their Own Capacity Problem
Another part of the hiring challenge is taking place behind the scenes. Sears said retail HR departments are increasingly being asked to manage traditional human-resources responsibilities while simultaneously adapting to technology- and AI-driven recruitment processes, often without corresponding increases in staffing, tools or budgets.
Rather than necessarily accelerating recruitment, Sears said those pressures can contribute to longer hiring cycles.
“Time to hire is increasing by months, not weeks,” Sears said.
That can leave positions vacant for extended periods while HR teams manage competing responsibilities. Those vacancies can become an operational issue, placing additional pressure on existing employees and potentially affecting customer service and sales performance.
Meanwhile, companies remain under pressure to control labour expenses, leaving HR teams attempting to reconcile demands for lower costs, faster hiring and stronger candidates.
A Recovery, but an Uneven One
Canada’s recent employment numbers provide growing evidence that retail-related hiring has begun to recover after a difficult period. Wholesale and retail employment increased in both June and July, while retail-specific payroll employment had already posted three consecutive monthly gains through May.
What is returning, where it is returning and who employers are able to recruit tell a more complicated story. Much of the hiring Sears is seeing is concentrated in frontline and part-time positions, while beauty and luxury retailers face difficulty finding employees with particular skills and experience. Compensation is rising but remains comparatively low, and career advancement opportunities can be limited for employees of international retailers whose major corporate functions are located elsewhere.
At the same time, thousands of workers displaced by major retail closures are not necessarily matching quickly with available positions. Retailers expanding into smaller markets can encounter limited local talent pools, while the HR departments responsible for filling those jobs are themselves being asked to do more with constrained resources.
The latest employment gains suggest the Canadian retail labour market is moving in a better direction, but the challenge facing retailers increasingly goes beyond the number of workers available. Employers must match people with the right skills and experience to jobs in the right locations, while offering compensation and career opportunities capable of attracting them.
