B.C. leads Canada in sales growth
Loonie’s weakness against greenback, infrastructure investments boosting business
B.C. retailers are off to a strong start in 2015, leading the country in year-over-year sales growth, according to a new report by Colliers International Consulting, which also named Weston Group as Canada’s largest retailer and Apple as the most productive.
B. C.’ s first-quarter sales growth was nearly eight per cent, according to Colliers’ spring 2015 National Retail Report.
That comes on the heels of a strong 2014 for B.C. retailers, which rang up more than $66.4 billion in retail sales last year.
Ontario, Quebec, Alberta and B.C. together accounted for 85 per cent of national retail sales last year. Ontario led the pack with total sales of $176.2 billion, and had a four per cent growth rate in the first quarter of this year, good for second after B.C.
The story in Alberta — Canada’s third-largest retail market in 2014, at $78.7 billion in sales — is much different, with retailers posting a year-over-year sales decrease of about three per cent, after leading the country in 2014 with a growth rate of nearly 10 per cent over 2013.
“B.C. is doing really well in terms of retail and commercial real estate, especially Vancouver,” said David Bell, Colliers senior associate, planning and retail.
“If I look at Metro Vancouver, it’s really driving strong B.C. performance in terms of retail commercial space.”
He said large landlords are investing heavily in retail assets, especially near major transit hubs. “There’s major investments going on in assets like Guildford Mall, Pacific Centre, Oakridge Centre — the redevelopment of Brentwood Mall is huge.”
He said B.C. retailers have weathered the struggles of Alberta after slumping oil prices and layoffs.
“Obviously what’s helping here is the strength of the U.S. economy and exports,” he said, adding tourists continue to keep the local stores busy. “And the low Canadian dollar is helping to keep spending at home.”
The report also named Weston Group — parent company to Loblaw, President’s Choice and Shoppers Drug Mart — as Canada’s largest retailer in terms of overall size and sales, based on 2013 stats. Since Loblaw’s purchase of Shoppers Drug Mart in 2013, the conglomerate’s footprint, comprising 22 chains, ballooned to 66.4 million square feet, with total sales of $ 43.3 billion. That surpasses Wa l-Mart ’s 55 million square feet spread across roughly 400 stores in Canada, with a total of $27.1 billion in sales. Wal-Mart, however, is the largest single-brand retailer in the country and is poised for a major expansion as it takes over 13 former Target locations in Canada, including four in B.C. Weston Group has nearly 1,400 stores and 250,000 employees, and represents more than 14 per cent of all retail sales in Canada, according to the report.
The Shoppers Drug Mart acquisition also gave it a firm grasp on urban markets, he said.
James Shandro, a commercial realtor specializing in retail sales and leasing for Avison Young in Vancouver, said demand for luxury goods and services appears to be driving growth in Vancouver’s urban retail market.
“There is quite an emphasis on higher-end or luxury brands, whether it’s fashion or even some much higher-end furniture players,” Shandro said. “Vancouver has also become a foodie town so there’s certainly no shortage of quality restaurants that need space. There are also a lot of lifestyle-oriented users … whether it’s wellness or specialized fitness, spin studios, yoga studios.” He said most of his listings and leases are taking place on busy street fronts and in mixed-use buildings.
The report also highlighted Apple as the nation’s most productive retailer. Occupying 203,000 sq. ft at 29 stores across Canada, Apple’s 2013 gross sales of $1.47 billion give it an average sales productivity rate of over $7,200 per square foot.
“That’s an outrageous number across the board, but I can tell you that Pacific Centre’s store, which is relatively small, is doing about $13,000 a square foot,” Bell said. “They’ve really reinvented what the retail store is. It’s more of an interactive environment. You’ve got four different ways of buying products right in the store,” he said, noting you can buy on your phone, on the clerk’s phone or from their terminals or register.
“They’ve done a great job of building up their brand’s desirability to the point where I think they’re just having fun with what a retail environment is.”