With holiday shopping season over, Canadian retailers closing stores
Published Thursday, January 3, 2019 12:05PM EST
Last Updated Thursday, January 3, 2019 2:45PM EST
When Canadian shoppers emerge from their post-holiday hibernation this spring, they’ll find that a number of familiar retailers have disappeared from the landscape.
All 38 Town Shoes footwear stores will close by the end of the month. By the end of February, Jean Machine’s 24 stores will have vanished.
Retail expert Bruce Winder says those types of smaller chains are among the most likely retailers to be unable to sustain themselves as consumer preference changes.
“Every year now, you’re going to see a few of these weaker players bow out,” he told CTVNews.ca via telephone Thursday.
“There’s going to be some folks who go bankrupt. There’s going to be some folks who get out.”
Although high consumer debt levels and relatively flat wage growth are putting pressure on the retail industry, Winder said the biggest factor leaving some stores twisting in the wind is the long-anticipated shift toward online shopping, with Canadians finally catching up to Americans and Brits when it comes to perusing and purchasing without leaving their homes.
“You’re seeing Canada come of age in retail as it relates to home delivery,” he said.
Amazon has been one of the biggest beneficiaries of this change, as reflected by its recent announcements of new Canadian facilities, including a 600-job distribution centre near Edmonton.
Most large Canadian retailers are keeping up as well, by adding online shopping and delivery options of their own. Even Canadian Tire, long a holdout in this area, quietly launched home delivery last fall.
But not all big players are immune to the changes in the retail market. Hardware giant Lowe’s announced last fall that it would close 27 stores, including 25 operating under the Rona banner, by the end of January.
Room for new players?
While brands familiar to Canadians might slowly be disappearing, they’re leaving behind empty storefronts that can be filled by companies with names more familiar in other parts of the world.
According to Retail Insider, 2017 marked a high-water point with more than 50 international brands opening their first stores in Canada. That trend continued on a slightly smaller scale in 2018, and is forecast to do so again this year.
“Canada has become the hotspot for companies dipping their toe in the North American retail market,” Winder said.
“People see Canada as a small but probably underdeveloped retail market, and maybe a bit of a testing ground for the bigger market, which is the U.S.”
Sometimes, though, international retailers find they can’t crack the Canadian retail market any better than domestic companies.
Retail Insider reports that the J. Crew store at Toronto’s Eaton Centre will close its doors for good on Sunday, marking the latest in a slow cross-Canada string of closures by the American-based chain.