Canadians Shopping Less at Department Stores and Fashion Retailers: Study

(Photo: Cadillac Fairview) 

(Photo: Cadillac Fairview) 

By Mario Toneguzzi

A new national study finds that department store and fashion shopping are in decline overall in the retail industry in Canada.

The DIG360Leger Canadian Department Store Fashion Shopper Study determined that 31 per cent of Canadians 18 years and older are shopping for fashion less often in the past two years, while only 14 per cent are shopping more.

And the declines correspond to income as 37 per cent of those with under $40,000 household income are shopping less, compared with just 22 per cent of those with over $100,000.

The study was based on a survey conducted by Leger of 1,566 adults Canadians between May 15 and May 18.

“There’s so much going on in the Department Store space right now,” says David Ian Gray, of Vancouver-based DIG360 Consulting Ltd. This week, for example, Sears Canada announced it would be liquidating and selling all its stores.

(Hudson's Bay, Yorkdale shopping centre. Photo: Hudson's Bay co.)

(Hudson's Bay, Yorkdale shopping centre. Photo: Hudson's Bay co.)

“We see the continued shift to value shopping . . . It’s a collective psyche we noticed kicking in around 2010. Not 2008 when we heard about the economic crisis in the States but for us it was about two years later. After many years of people just spending on credit cards and ‘retail therapy’, suddenly budgeting was becoming a mainstay.

“The frugality isn’t just about shifting to Walmart. It also means just buying less.”

The report says 18 per cent shopped at a Canadian discount outlet mall in the past year.

“We expect this to grow with the addition of more of the concepts in the Canadian retail landscape,” says the study. “Originally, Department Stores were a modern solution to the shopping convenience demanded by a growing urbanite population. They housed a wide range of products in one building and were a beacon of traffic. Then came the explosion of enclosed shopping centres, then global specialty retailers, power centres and now high streets and ecommerce.

“Notably, 72 per cent of Canadians wait for sales to shop at Department Stores, reflecting the national propensity to more budget conscious households and the fiscal challenge facing these stores. And there are the naysayers: 35 per cent of us feel the Department Store concept is tired and dated, and 35 per cent say they are too big and a waste of time.”

(La Maison Simons at galeries d'Anjou in Montreal. Photo: Simons) 

(La Maison Simons at galeries d'Anjou in Montreal. Photo: Simons) 

Gray says where that retail therapy has picked up has been in the personal care sector and the cosmetics category within Department Stores “is going through the roof right now.”

The study also found:

  • fashion shopping continues to be a young person’s sport, as 31 per cent of those 18-24 are increasing their fashion shopping in the past two years (compared to 23 per cent of this age group shopping less);

  • there is a significant drop in fashion shopping around age 45, with just seven per cent of those 45 and older reporting an increase in fashion shopping and 36 per cent a decrease;

  • That 37 per cent  of women reported shopping less for fashion should alarm retailers of women’s apparel, particularly at a time of greater competition and choice.

The report said 54 per cent of Canadian adults shopped Department Stores for clothes in the past 12 months and of those shopping more for fashion in the past two years, 76 per cent shopped Department Stores in the past year.

Two-thirds of Canadians like the variety and brands carried by Department Stores and only 25 per cent prefer shopping brands’ own standalone stores over the fashion they sell in Department Stores.

“As a reminder that many shoppers reside outside the downtown cores of our major cities, the highest shopping incidence is for those with the broadest regional coverage of stores.

Hudson's Bay Company leads at 31 per cent of adult Canadians buying in the past year. Sears was a close second at 28 per cent, with the advantage of substantial store coverage in Quebec. Over half of adult Canadians (55 per cent) shop Walmart for at least some fashion in the past 12 months,” says the study.

(Sears Canada announced this week that it plans to shut its entire operations. Photo: Sears Canada) 

(Sears Canada announced this week that it plans to shut its entire operations. Photo: Sears Canada) 

“For many, Sears was a very important part of their shopping lives – closures here will leave a void.”

The study also says Nordstrom is introducing younger shoppers back to Department Stores.

“Those who are generally shopping less are favouring Walmart, Sears, Winners and other value-priced department and specialty stores. While not a full-range fashion department store, the regular traffic Walmart generates for other merchandise has led two-thirds (66 per cent) of Canadians with household income under $40,000 to report a clothing purchase in the past year. Notably, almost half (46%) of those with income over $100,000 also report purchasing clothes at Walmart,” it says.

“Another notable player is Winners with 39 per cent of shoppers buying. This is far ahead of other specialty chains and certainly elevates it to a department store-like impact. Of chain retailers, Winners had 48 per cent and H&M captured 34 per cent of those Canadians who increased their fashion shopping.”

*David Ian Gray of DIG360 and Leger will be discussing the study as part of a presentation today at Retail Council of Canada's Retail West conference in Vancouver. 

Mario Toneguzzi Headshot.jpg

Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, city and breaking news, and business. For 12 years as a business writer, his main beats were commercial and residential real estate, retail, small business and general economic news. He nows works on his own as a freelance writer and consultant in communications and media relations/training. Email: mdtoneguzzi@gmail.com

Canadian Retail News From Around The Web: October 12, 2017

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Mario Toneguzzi

Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, city and breaking news, and business. For 12 years as a business writer, his main beats were commercial and residential real estate, retail, small business and general economic news. He nows works on his own as a freelance writer and consultant in communications and media relations/training. Email: mdtoneguzzi@gmail.com.