By Craig Patterson
Last year was a record breaker in terms of the number of international retailers that entered Canada by opening stores, and 2018 could see even more as we look towards the next six months. There's no ‘retail apocalypse’ in Canada as is being claimed by some in the United States, though the dynamics are changing and some markets are more challenging than others. Homegrown retailers and those already doing business in Canada will feel the effects of ever-increasing competition for limited consumer dollars.
In 2017, we tallied more than 50 international retailers that entered Canada by opening stores, which was an unexpected find considering that we had expected a slowdown from years prior. We’ve been tracking retailers in the country over the past several years and in 2016, we thought we’d seen a lot when we mapped out 21 new international retailers and in 2015, when we counted 28 of them. Our tally doesn’t generally include restaurant concepts, for the most part, so we wouldn’t count concepts such as Chik Fil A, which is said to be launching its Canadian expansion through southern Ontario.
Since January of this year, we’ve reported on more than 30 retail concepts that have either already opened stores in Canada, or will be entering the country some time this year. Although we do our best to keep on top of what’s happening, some retailers have surprised us by quietly entering the market either on their own or in some cases through a host such as at an airport. The range of new openings range from value-priced Nordstrom Rack to luxury stores such as Chloé and Bottega Veneta. Some brands enter Canada with just one location to start — Atelier Cologne is an example — while others, such as Laline, have revealed an entry with seven locations set to open in Ontario this year.
Our list also doesn’t include some brands that are said to be seeking out space in Canada — Furla and Ray Ban come to mind, with both brands looking to enter the Canadian market by opening retail stores. Others, such as Alfred Dunhill are said to be eyeing the market while others, such as Sweden’s Lindex, are seeking local partners prior to initiating any Canadian expansion plans.
Furthermore, Canada is seeing several first-ever retail concepts come into the market. Some of these are homegrown and interestingly, several are international. Canadian brands opening stores include the likes of SOIA & KYO, which will open its first standalone store at Mississauga’s Square One this fall, not to mention accessory retailer Suzi Roher which is opening on Toronto’s Queen Street West this week, and Edmonton’s EMMYDEVEAU brand which entrepreneur Emily Salsbury-Derveaux is looking to take national. An example of an international brand opening its first-ever store in Canada is DSW Shoes-owned sneaker concept GRAIL, which opened recently on Vancouver’s tony South-Granville strip.
Mike Kehoe, Calgary-based founder/broker at Fairfield Commercial Real Estate, says that he’s hearing that 2018 could set records in Canada in terms of the number of new entrants coming into the country. Mr. Kehoe is an Ambassador with ICSC and says that this is a point of discussion amongst those involved with the organization, including at the recently held ReCon conference in Las Vegas.
While brokers have traditionally been the ones to work with new brands coming into Canada, a couple of major shopping centre landlords are now also going directly to international brands to entice them to enter the Canadian market. Several of the recent deals for first-to-market retailers at Toronto’s Yorkdale Shopping Centre, for example, were negotiated by Oxford Properties directly with the retailer.
Yorkdale, in fact, remains the single most significant entry point for international retailers looking to get a foothold in Canada, as it has been for the past several years. A recent CBRE report noted that of the 40 retailers it had identified as having entered the Toronto market with first-to-Canada locations, 14 of them were via Yorkdale. So far in 2018, Retail Insider has identified eight international retailers, all considered to be luxury brands, which have either already opened their first Canadian stores in the centre, or will before the end of this year in the mall.
One interesting trend we’re noticing, as well, is the continued popularity of some urban street-front locations for international retailers that are opening their first stores. Toronto’s Queen Street West has been the entry point for several first-to-Canada stores this year. Vancouver’s Alberni Street ‘Luxury Zone’ also remains an important address for brands looking to make the leap into Canada.
At the end of 2018, we’ll do another tally to see if this year was another record breaker. As well, we’ll create a list of these retailers, as we have for the past several years, as we continue to track international movements within the Canadian retail industry.