Retail is a big business in Canada. It accounts for more than $600 billion a year and accounts for a fifth of all retail sales in the country. In this episode, TPL Media's Mike and Paul discuss the impact of major department stores closing across the country, and the impact on retail in general. They are joined by Bruce Winder, a retail expert here in Canada, to discuss the effect of these closures.
00:01:27.480And accessories for auto overall up across the nation, which means people are putting repairs and parts into their car rather than buying new.
00:01:36.760This and many other sectors we're going to investigate today as we're joined by Bruce Winder.
00:02:28.760So, OK, maybe, Paul, you've made the observation that I've made that it seems like retail,
00:02:36.120especially with, you know, the Amazons of the world out there and some of the amalgamation and the shutdowns we've seen.
00:02:42.420I don't know why, but I made the assumption out of the gate that retail was under some pressure in Canada.
00:02:47.760Yeah, retail is a big business. You know, it's north of 600 billion a year in Canada. And it ebb and flows a little bit up and down, you know, depending on the month. Sometimes it's a little confusing, too, because some data shows it's up month to month. The data you should really look at is sort of year over year. But either way, retail in Canada right now is sort of flat to up a little bit, depending on the timing.
00:03:14.300And, you know, it's a big industry. It's not a broken industry by any means, but there are challenges, you know, with the industry, like every industry.
00:03:23.500And it does have a natural sort of circle of life effect where, you know, weaker players bow out and new players emerge.
00:03:34.080What is the overall, in the sort of retail space of shopping malls, not too far from us here in Toronto is Sherway, which just lost two major retailers just up the street on the 427 on the right in the last couple of years, lost another major department store retailer.
00:03:54.840What kind of effect are these major retailers packing up having on retail overall in Canada?
00:04:01.500Yeah, I mean, the irony is that, you know, some of the retailers who've packed up and left, you know, you look at the international retailers like Nordstrom, who packed up and then Saks have packed up as well. They really didn't do a lot of business in Canada anyways. They had big footprints, they had big, beautiful stores, but they really, you know, missed the mark in terms of addressing, I think, the market in Canada.
00:04:27.060They may have overshot the runway and had too many stores.
00:07:01.680More online, more with specialty stores.
00:07:04.340The whole department store sector has changed. It's shrunk considerably. It's in decline. That's why you saw Eaton's and Simpson's and a lot of those folks bow out over the last 20 to 30 years. So where we are now is we have all these legacy malls with big legacy footprints. When department stores were the anchor of the mall 30, 40, 50 years ago, those days are gone.
00:07:28.280So what's happening now, depending on the property, is landlords are looking at trying to probably divide the space up at least into a few different floors, you know, and lease it to good retailers or good service providers for those floors.
00:07:44.140You know, you look at what's happened in the Toronto Eaton Centre, Nordstrom left, some of it went to Nike, some of it went to Eataly on the side, Simons took a little bit.
00:07:54.660So that's sort of more what's happening in the good malls. In the malls that might not be tier one or A malls, they're struggling. They're struggling to find someone who's going to go in it. And there isn't some large sort of heir apparent who's looking to sweep it, swoop in and take all that space. It's just not a market reality now for most malls.
00:08:15.020yeah it's so interesting that you say the eataly model right because um recently i was in a
00:08:20.860situation in a mall and it was obvious to me that a large retailer had they'd taken one floor made
00:08:27.420it a restaurant the top floor was sort of a marketplace of different stores or shops or
00:08:33.360specialty retailers but there was no indication that they were going to put another major department
00:08:38.660store in there yeah we were we were in actually one uh it was a you know a basically an abandoned
00:08:45.340big box and uh they had actually rented it out for movie storage yeah they put that was interesting
00:08:52.440amazon's uh set storage space which you know based on the way that's going right now in canada
00:08:58.920versus all these u.s tariffs and you know the movie industry uh that used to be uh robust in
00:09:05.420canada and it's changing now i don't know what happens to that well we're storing our stuff at
00:09:09.880the malls and that's any indication yeah yeah right and how much more storage you know we've
00:09:15.060been on as this uh rapid growth in storage in canada how much more storage space do we really
00:09:20.960need to be building you gotta wonder you know one of the things uh bruce that i i gotta commend paul
00:09:26.360for he as soon as we hit a topic he does the numbers and he finds some some beauties in here
00:09:34.560But as we went through year over year retail industry numbers overall, the increase in retail that I saw, I think was related to something that's not necessarily that wonderful for consumers and certainly something that could affect people in the lower economic realm, seniors and that sort of thing.
00:09:57.400And I'll leave it to Paul to kind of give us the review on it here.
00:10:00.440Yeah, we took a look, Bruce, and you've probably been through the numbers much more than I have, but we look at January 2026 compared to January 2025, kind of broke down the stats and really came up with the differences from a percentage basis and the dollar basis.
00:10:20.380What jumped out at us right away was how much basically food, grocery accessories had gone up.
00:10:33.360And we were, of course, we all talk about it, but it was quite a bit.
00:10:37.660You know, food and beverage retailers, supermarkets basically made up about $710 million of increases year on year.
00:10:49.540And then cars, which we all knew, had shifted a tiny bit to used cars and parts.
00:10:55.060But for the most part, new car sales had just plummeted for comparing the two years.
00:11:00.760So it's just so interesting to see that.
00:11:51.260So the issue that the grocery industry had is that there's significant input cost increases around the world for different commodities.
00:11:58.700And some of it's not around the world.
00:12:00.580Some of it's local, like the price of beef based on herd, the price of coffee based on different weather patterns and things of that nature.
00:12:08.520And even large consumer packaged goods companies since the pandemic have taken price as a way to meet their earnings targets.
00:12:16.860They've increased price. So so it's a really tough industry and it hits Canadians on the front line.
00:12:22.660That's why what you're seeing is a lot of Canadians have changed the way they've shopped for groceries.
00:12:26.860They're buying more private label. They're shopping more at discount banners like No Frills and Maxi in Quebec to save money.
00:12:34.580You know, they're buying more frozen food versus fresh food.
00:12:38.520But that's sort of, you know, that's one of the things that is a big issue for Canadians right now, right?
00:12:44.280And it's not the only thing you look at, you know, rents have come down a little bit, but you look at the price of housing, you know, you look at other input costs, insurance, etc.
00:12:53.440It's really difficult for a lot of Canadians to make ends meet these days.
00:12:57.520So what you're seeing is Canadians take fairly drastic approaches in terms of how they shop to save whatever they can.
00:13:06.340And the other thing that you touched on it just just now, as we look at these numbers and Paul, maybe you can straighten this out for me as well.
00:13:15.360Sure. We look at these numbers year over year, and it doesn't necessarily mean that we're doing good as an economy nationally.
00:13:22.760It just means that we're spending more. Doesn't mean that we're making more.
00:13:26.800It doesn't mean that our economy is booming. This one sector is doing very well in a number of very specific areas.
00:13:35.340Outside of that, I don't think that spending in retail, and maybe Bruce, you could kind of touch
00:13:41.420on this. I don't think it has much to do with how we're doing as an economy as Canada.
00:13:48.120Yeah, it's a real tough one because, you know, we've all seen the GDP numbers. We're not
00:13:52.180necessarily lighting it up as a country right now, right? I think our GDP was down in December.
00:13:57.420But we are, you know, we are looking at inflation and there is a bit of a disconnect. There's
00:14:01.800something in retail and other commodities a lot of economists talked about called the k-shaped
00:14:06.040economy where what you're seeing is you're seeing more of more of the affluent folks call it the top
00:14:11.04020 30 percent of income are doing most of the spending these days most of the increase in
00:14:16.300spending and the other folks because wages haven't necessarily kept up with inflation over the last
00:14:22.24050 years they're really sort of tightening their belt so on the surface things look one way but
00:14:27.680when you really dig into it, there's sort of different demographics in play here. But no,
00:14:33.540I would agree with you. I mean, even retail sales going up a little bit doesn't necessarily mean
00:14:37.680that we're doing well as an economy. Well, you know, it's interesting, Bruce, I was telling
00:14:41.860Mike before the show, and we were talking about how we used to shop in the early 90s, and how we
00:14:48.040used to go from the open markets to the discount stores. So you might hit four stores to do your
00:14:57.320shopping and then somewhere kind of around 2000 you know we got away from that and we started just
00:15:03.560to go to one store well i find even my shopping habits now are going back to going to multiple
00:15:08.440stores yeah but i'm still seeing the increase and you know it's it's interesting from looking
00:15:12.600at the stats can comparison january 25 to 26 i kind of looked at it anything that i put in my
00:15:19.320mouth that's on this chart has basically gone up almost by just a little under two billion dollars
00:15:25.800month uh month to month year to year or year to year so it's interesting how that's kind of changed
00:15:32.680my shopping habit so i'm in the same boat i think that many people are you you you go to the place
00:15:39.000where you're familiar you get good quality items that are that price based on that store exactly
00:15:46.120i i can't trust the big grocery stores to have all of the items actually in stock that i want
00:15:52.200good quality like i like and at the price you have to really shop now but still canadians are paying
00:15:58.680more that's the interesting part and that's you know the squeeze that i felt you know when i
00:16:03.240mentioned the late 80s early 90s that's sort of what we felt at that time you know it's interesting
00:16:09.400you know you take that and i looked at the gas stations expenditures were down almost you know
00:16:16.440well that's going to change that's changing as we speak before gas prices right so now you're
00:16:24.760going to look at this probably you know in march and april now and you're going to see this massive
00:16:29.560spike you're going to see the swing of this which is then are going to show to your point bruce's
00:16:34.760point on numbers for retail spans it's going to show a substantial increase but you know i'm
00:16:40.680watching now i don't know if you're you know wherever you live bruce i know where where i'm
00:16:45.080traveling this morning i was going between two businesses and i was using the 400 highways um
00:16:52.120no one it was quiet it was actually my drive time was about 15 20 minutes faster you know my ways
00:16:59.000was not flagging you know 18 minute uh delays i was moving and this has been all week long and
00:17:06.520it's funny because most of the march break is kind of coming to an end yeah last week
00:17:12.040so a lot of march break there is some stragglers but it's funny that you say that i thought this
00:17:16.520morning oh this is this march breaker was it last week because it was so light on the road it was
00:17:22.280technically so it was a lot of private schools are still out you know for a couple weeks but
00:17:26.920for the most part we've seen you know a real difference in traffic this month gas prices have
00:17:33.640gone up so are we going to see the counterbalancing between uh gas going up and people's you know
00:17:40.600know number of kilometers they put on they're driving well yeah it'll affect i guess the car
00:17:46.120parts it would then affect car sales car leasing which is interesting because that was the comment
00:17:51.620i made to you know at the beginning of the show new car sales dropped it dropped to actually almost
00:17:57.220700 million a year on year we start to see again used cars and so funny for their you know coming
00:18:04.380through covid you know i used to make a comment to my wife said you know it's not like the old
00:18:09.700days when we used to see a lot of used cars you know a lot of 10 year old cars a lot of you know
00:18:14.640parts stores auto mechanics used to see a ton more auto mechanics now it looks like we're going back
00:18:20.800there again right it looks like we're going back to people going to the used car lot you know
00:18:26.100buying a used car keeping it on the road as long as they can keep it on the road all those
00:18:30.880accessorizing rather than trading in and these stats you know are starting to tell that story
00:18:36.360that's what i love about the numbers i you know what you do bruce is really interesting to me
00:18:40.660because just sitting there and watching the human behavior trends that tie to the numbers is
00:18:45.780so interesting yeah and you're right i mean i you know this i'm without dating myself i'm 59
00:18:51.200i almost feel like we're starting to slowly go back into the 70s again where inflation was high
00:18:56.620and consumers drastically changed the way they consumed they fixed things instead of buying new
00:19:01.160things you know they ate at home more instead of going to restaurants etc just like you're
00:19:05.340mentioning but yeah you're starting to see that i mean it's going to be tough if the if the conflict
00:19:09.840in the middle east continues for much longer you know you're going to start to see more inflation
00:19:14.300uh hitting not just the pumps but also goods and services or goods i should say on retail shelves
00:19:20.680because the transportation cost to move those goods is going to be negatively affected by the
00:19:25.200increase in oil so you're going to see uh probably some discretionary categories hit even further
00:19:30.540including the restaurant industry etc it's interesting because you know double whammy
00:19:35.980in some industries i was uh we were prepping for the show on the lawsuit with meta and youtube this
00:19:42.780week and i was listening to another podcast and it was prior to the the court decision
00:19:49.420and he was talking about the fact that with the um middle east having so many challenges
00:19:55.980and the potential for infrastructure damage throughout in each of the countries
00:20:00.860that would cost the families that control each of the countries to stop their investment
00:20:05.580in high-tech industries in north america so it's an interesting chain they're going to have to
00:20:11.420focus their their dollars at home they're going to have to try to fix their the you know the
00:20:15.900the infrastructure of their own countries and they won't have as much outside investment company
00:20:20.780you you know you you look at that and then the double whammy with what's going on there
00:20:25.100if the tech industries drop in the us right now which is a big part of their stock markets yeah
00:20:30.780it would cause a huge ripple effect through the stock markets at all levels which would then kind
00:20:35.980of cause our economy on top of this lawsuit that just came you're going to watch you know these
00:20:42.060numbers as you as bruce was alluding to you're going to watch kind of how that ripples through
00:20:47.260expenditure numbers and what that causes and it's so interesting to see that those world events are
00:20:53.020tying into these retail sales the other thing that occurred to me as i took a look at this list
00:20:58.140is apparently we are all done we all have the tech we need right now uh tech sales are down
00:21:03.820dramatically uh and i think and i really do believe that it's that we're in that place with
00:21:09.020our own expenses in life where you've got to keep that phone the extra couple of years there will be
00:21:14.620no trade-in because it's just not feasible that macbook that you bought three years ago is not
00:21:20.380going to be traded in this year uh i think that we have all settled on tech that is there's nothing
00:21:25.980fantastic and new about any technology you bring home we've all got a flat screen tv we've all got
00:21:31.180a notebook we've got our phones and we all have chat gpt heaven help us so uh once we're all
00:21:38.700equipped i i see this number go down and it's it's not a small drop it was somewhere in the
00:21:44.860neighborhood of around four percent uh it fell off over year year over year the other one that
00:21:50.140i noticed and maybe you can comment on this apparently nobody's drinking anymore and
00:21:54.380everybody's getting high liquor sales fell off uh uh almost uh a point and a half meanwhile
00:22:02.380cannabis retailers are reporting a 6.4 increase or 29 million dollars more in the in the industry
00:22:09.340yeah there's definitely been a trend over the last several years uh of younger people uh drinking
00:22:14.460less alcohol and uh and enjoying cannabis more that's definitely been a major trend uh with you
00:22:21.260know younger millennials gen zed uh they're doing that for sure and and you're seeing that you're
00:22:26.620seeing that in the sales of alcohol you're seeing that in the sales of cannabis which remains a tough
00:22:30.940industry yeah it seems like there's not a lot of uh a lot of winners in that industry as well you
00:22:37.340know the one that did interest me quite a bit which i i think i have a handle on but i'm not
00:22:42.540sure that's why i wanted to ask bruce two of them that really did that went up which was interesting
00:22:47.900in spend which was clothing which i was a little shocked that in january year over year we'd see
00:22:53.260clothing increased i wasn't sure if that was a sell-off of inventory bruce or if that was just
00:23:00.380a trend of increased you know clothing sales yeah it could be a little bit of both i don't have exact
00:23:06.380data but it could be clearance you're right because you know if things are a little tough
00:23:10.060for some retailers, they've got to get aggressive on clearance in January. It could also be weather
00:23:15.900patterns too. You know, we've had a pretty tough winter in some parts of Canada where Canadians
00:23:19.980had to buy maybe warmer clothes and things of that nature. But there definitely isn't sort of
00:23:24.820an upward shift, you know, in apparel. You know, if anything, people have bought more from some of
00:23:30.360the places like Sheen from China where that would deflate prices. So it's a tough category,
00:23:36.320very profitable from a retail perspective, but fairly tough category still.
00:23:40.060Yeah, no, and I did think of that because everywhere I go now, it looks like 40%, 60% off. The other one I thought was interesting in the numbers, the StatsCan numbers, was the e-commerce numbers for January to January stayed relatively flat.
00:23:56.540I noticed that as well, and I was going to try to address this.
00:23:59.600I was like, oh, that's interesting, right? They might have burnt themselves out over Christmas, right? Weren't the e-commerce numbers over Christmas really great, Bruce, or from November onward?
00:24:09.520Yeah. I mean, e-commerce as a trend has been increasing. It went gangbusters during the
00:24:14.580pandemic, as you know. And then after that, it sort of settled back down for a while. But since
00:24:19.420then, call it 2022, it's been on an upward trajectory again. And e-commerce had a pretty
00:24:25.540good fall. It just might be, it's probably a small base in January too. There's returns,
00:24:31.300if anything, and not a lot of sales. But e-commerce is here to stay. Definitely,
00:24:36.140you know if you're amazon they've invested a ton of money in the country they've got great
00:24:40.360infrastructure here so it's something canadians love too and in some places within canada you
00:24:45.840can order from amazon and get it within a few hours so it's and now now now timu is also a
00:24:53.240service in canada i think from within uh opening up warehouses here as well so even even amazon
00:24:59.940light as my family likes to call it uh is now available in canada which is going to make a big
00:25:05.420difference you know i think amazon having competition to some degree um i don't think
00:25:12.620that they lose any business i think just more more business is brought to e-commerce yeah
00:25:17.260no i'm with you and the month-to-month increase of uh sporting goods books and hobbies which was
00:25:24.620almost to tell you the truth 500 million dollars year over year for january i thought that was
00:25:30.620amazing now bruce you know give me your opinion i have my own sort of thoughts on that i didn't get
00:25:37.420any time to dig into it but is there anything in the sporting goods books and hobbies front that
00:25:42.220you're seeing you know prior to january wait wait bruce hold on before you answer that sure i would
00:25:47.820like to just write i'd like to write my prediction down first okay all right okay give me that give
00:26:23.240And some of these sporting goods categories cater more to the affluent folks who are making $400,000, $500,000 a year.
00:26:30.420But if you're not one of those affluent folks, you're probably spending less in this category because it's more discretionary.
00:26:36.720So, again, that's where we start to see the K-shaped economy come in where there's really two Canadas, depending on what income you have and how you spend.
00:26:53.240that's actually a good point too you're right that's a good point too because canadians are
00:26:56.860traveling less to the u.s right so they might be doing more more domestic things that's a good
00:27:01.040point oh yeah we got a pickleball that's what we got left did you i i know i i went and uh bought
00:27:06.440new skates build a skating rink for the kids in the neighborhood and i spent a ton of money on
00:27:11.180uh you know ice prep stuff and shovels and so yeah you know that would i got that probably
00:27:18.060was factor into it too i think that that must be some of it you know that discretionary spending
00:27:22.900You can't, you know, you won't spend as much on hobbies, perhaps, but they tend to listen.
00:27:28.940I think that this has been a valuable conversation.
00:27:32.860And as retail changes and as we get confused in the marketplace, Bruce, we will come back to you if you don't mind.
00:27:39.940Sure, of course. Yeah, no problem. Thanks for having me on.
00:27:42.540I really appreciate this. And thank you for joining us.
00:27:45.480Don't forget, subscribe, tell a friend, and for goodness sake, don't hesitate to donate and subscribe as a paid subscriber because that's what keeps the wheels on the cart here and keeps us spending on retail.