It’s being called a “retail apocalypse” in the US — even more store space is disappearing as some chains struggle to keep customers coming through their doors.
Business Insider reports at least 94 million square feet of retail space has disappeared in the US so far this year, already closing in on the record 105 million lost in 2017.
But analysts like David Ian Gray with DIG360 in Vancouver say Canadian stores are not necessarily feeling the same kind of pinch.
“The retail apocalypse is a myth — it’s hype,” he tells NEWS 1130. “Physical retail is not dead, it’s just undergoing tremendous transformation. Where we stores closing, in many cases it’s in markets that are ‘overstored’ and there’s too much competition for what the demand is.”
Gray says the demand is still there, it is just a reduction or “course correction”, but not as much as what is being seen south of the border, which has much more physical retail space per capita than Canada and has had a tougher time recovering from the recession of 2008.
He adds that it is the legacy retailers — those bogged down in older, slower cultures and processes — that are disappearing, but other retail models, such as the Apple Store are thriving.
“We are seeing space reduction and a lot of closures but we are also seeing a lot of new international retail and others coming into Canada,” Gray tells NEWS 1130.
One example is Japanese casual apparel retailer UNIQLO, which announced Wednesday it will be opening four new stores in Canada this fall, including one at Coquitlam Centre.
And while online shopping is being blamed for taking a bite out of brick and mortar retail, Gray says it only accounts for 10 per cent of sales in Canada and 15 per cent in the US.
“The online, or e-commerce, channel is taking some retail sales but not wiping out retail any time soon,” he adds. “But it is spooking retail owners into smaller footprints for retail space, both because they are a little nervous about committing to a big space but also because they can achieve cost savings in a smaller space,” he says.
Meanwhile, a business leader in Vancouver calls the local retail scene a “tale of two cities.”
“It’s challenging in Vancouver for a variety of other reasons, including the cost of rent and property taxes,” says Charles Gauthier, president of the Downtown Vancouver Business Improvement Association.
“But luxury brands are doing very well. They are looking for more space to expand, especially along the Alberni Street corridor. Frankly, I think it is a tale of two cities with some of the other price-points not doing as well.”
Gauthier expects some of the remaining fast food chains and restaurants along Alberni will soon be squeezed off of the swanky strip.