Higher minimum wages, a glut of unemployed retail workers and fierce online competition will accelerate the Canadian retail sector’s push toward high-tech shopping solutions in 2018, according to experts.

Online juggernaut Amazon is expected to strengthen its presence in Canada, while other major retailers will either play catch-up or die in the race to meet shoppers’ needs online. Meanwhile, experts predict some mid- and lower-tier stores will fold or sell out to larger competitors, as brick-and-mortar retail continues to retreat and shopping malls struggle to remain relevant.

“You’re going to see Canadian retailers finally have to start to get really serious about online,” retail expert Bruce Winder told CTVNews.ca in a telephone interview from Toronto.

That transition could spell the end of some well-known Canadian brands, much as it did for Sears Canada in 2017.

CTVNews.ca takes a look at some of the stores and trends to expect in retail in 2018.

Canadian Tire

Canadian Tire

Canadian Tire’s reluctance to embrace online ordering may spell trouble for its prospects in 2018, Winder said. He predicted last year that a major shakeup in the company’s leadership might usher in a more modern e-commerce strategy, but that failed to materialize in 2017. Now, Winder says Canadian Tire may find itself on the verge of falling behind.

“The big ‘wait and see’ is going to be, is Canadian Tire going to get in the online ordering business again?” he said.

It’s been nearly a decade since Canadian Tire nixed widespread home delivery, citing the impracticality of delivering items such as tires and patio sets. The company has re-launched home delivery in the Ottawa market, but has been slow to expand beyond that area. Anyone outside the Canadian capital can purchase certain types of products online, but they still need to go to a physical Canadian Tire store to pick up their items.

That’s a far cry from the services afforded by Canadian Tire’s competitor, Walmart Canada, which boasts a full online catalogue and offers free shipping on purchases over $50.

Winder says Canadian Tire needs to catch up with the times. “They’re going to have to get real serious, real quick, or else they’re going to find themselves in a bit of a pickle.”

But retail expert Robin Sherk, of Kantar Retail, says Canadian Tire is being smart with its measured approach to online sales, because its first foray into that area was unsuccessful. “They found that shipping canoes is not exactly profitable,” she told CTVNews.ca.

She adds that the company is “leaning in heavily” on e-commerce, but that it’s still trying to go “slow and steady” with its build-up.

Sherk also said it’s important not to discount Canadian Tire’s longstanding status as a fixture in many communities.

“They have a big store base. They can reach everyone,” she said. “They have that type of connection that good online players simply don’t.”

Hudson's Bay Company

Hudson's Bay

Winder says the Hudson’s Bay Company will be a “wild card” in 2018, in that it might opt to sell off assets or real estate to score some extra cash.

“I think they’re coming to terms with the fact that they’re in a really tough segment and that they can’t keep going as is,” he said.

Winder says HBC’s Saks off Fifth brand is perhaps its most valuable asset. He says brands such as Saks or Nordstrom will do “okay” in 2018 because of the growing polarization of income in society, with malls now reorganizing themselves around either high-end luxury or lower-tier discount retailers. Saks meets that high-end demand, he says.

Sherk said HBC might actually benefit from the demise of Sears Canada by scooping up some of its customers.

“You will have more shoppers looking for department store options, and HBC is widely accessible,” she said.

Amazon vs. traditional grocers

Gathering an order at a Loblaw's store

Grocery chains will face stiff competition in 2018, especially when Amazon expands its service to include food delivery in Canada, as it’s already doing in the United States.

“That’s going to have significant impact on Canadian grocery retailers,” Winder said. He added that it’s just a “matter of time” until Amazon launches grocery delivery in major centres like Toronto and Vancouver through Whole Foods, which it acquired last summer.

In the meantime, grocers such as Loblaw have been stepping up their home delivery efforts to stay ahead of the anticipated challenge from Amazon. Loblaw has also added a variety of non-grocery services to its stores, such as alcohol and its Joe Fresh clothing line, in an effort to expand customers’ basket size.

“Their goal is to become a one-stop shop and they’re relentless in their pursuit,” retail consultant David Bartolini told Business News Network in a November Interview.

Bartolini said Loblaw is trying to stay ahead of the curve by placing more emphasis on shopper analytics through its PC Plus points program. PC recently announced a merger with the Shoppers Optimum program, which will allow the two loyalty programs to combine the data they’ve collected on individual customers.

“Today’s customers have multiple points cards. They’re trying to condense that,” Bartolini said. “It’s a proactive investment to understand customers.”

He says that shift comes in response to Amazon’s attempt to become a one-stop shop for customers.

Sherk also sees Amazon as a major disruptor for Canadian grocery stores.

“You’re going to see all these major players stepping up investment in their online grocery presence to defend against that Amazon threat,” she said.

Winder and Sherk both suggested home-delivered meal kits will likely become more popular in 2018, as Canadians embrace the ready-to-cook aspect of services like Chefs Plate or Goodfood.

Discount shoppers


Sherk predicts 2018 will see the rise of what she calls the “discounter,” or the shopper looking to get the most bang for the buck.

She says Dollarama is once again expected to be a major player in 2018, as the retail market continues to polarize into either luxury or discount shopping tastes.

Sherk says there’s a “strong pipeline of growth” for Dollarama and Dollar Tree, as well as other low-cost brands.

She also hailed the future of Costco, which she praised for combining discount prices and a “treasure hunting”-type shopping experience that makes visiting its stores an “event.”


Higher minimum wages in Ontario and Alberta are expected to put the squeeze on many retailers, prompting some to invest in self-checkout services that will save them more money in the long run.

“You’re going to see an acceleration of technology in retail to try to lower their dependence on people, because wages are going up,” Winder said.

He suggests the companies that can’t pay for new technology will be forced to slash costs by cutting workers – a harsh reality that will likely lead to an overall drop in customer service.

He says this move toward automation will also put pressure on the already strained population of former retail employees created by the demise of Sears.

“It’s a really tough reconciliation for retail employees right now,” he said. “The ‘Sears effect’ is really going to be one of the big effects.”

Sherk says this shift to self-checkout is all part of a move toward emphasizing convenience in the shopping experience – and it may not stop with self-checkout. Mobile self-checkout is already being tested at some Walmart stores, and will likely catch on at more retailers in the future, she said.

Retailer-specific mobile apps

Starbucks ordering app

Many retailers are already jumping on the trend toward brand-specific mobile apps, which allow companies to sell directly to users without sharing space with the rest of your browser tabs.

“They need to have their own app,” Winder said. “They need to sell directly to customers.”

Winder says the trend is already spreading quickly in the fast food industry, with Tim Hortons, McDonald’s, Swiss Chalet and Starbucks all pushing customers to download their apps so they can order ahead and pick-up items in person.

“Most good retailers already have an app where you can order and pick it up in store.”

A dramatic shift for malls

Why are neighbourhood malls are struggling to surv

Online shopping will continue to cannibalize brick-and-mortar retail stores in 2018, forcing shopping malls to begin a major transformation process as they try to fill the large gaps left by retailers like Sears Canada.

“The malls are going to take on a new level of emptiness,” Winder said. He says online sales are making it increasingly difficult to lure customers into big-box stores, meaning that space will need to be reused for other purposes.

Winder suggests Canadians will see many of those former Sears locations transformed into fitness centres, doctor’s offices or residential spaces.

Some malls might go under entirely, while others are forced to change gears toward high-end or discount shoppers.

“What we’re feeling now is what the U.S. was feeling a few years ago,” Winder said.

He adds that the retail crunch will likely continue through 2018 to 2019 or 2020, as Canada catches up to the more intense online shopping habits of the United States and the U.K.

“It’s all being caused by online,” he said.