Amid the growing popularity of online channels among merchants and consumers alike, major department store chains are in a grave struggle to survive—or have even disappeared altogether, if Target is any indication—in Canada, but Montreal’s retail real estate sector is not throwing in the towel just yet.
Several of the city’s mall owners are investing millions into renovations as demand for retail space does not appear to be flagging down any time soon—at least in certain locales.
“It’s very individual,” according to Craig Patterson, founder and editor-in-chief of online industry publication Retail Insider. “You’ve got some centres which seem to be doing better than ever.”
“I certainly wouldn’t say that everyone in Canadian retail is struggling but, certainly, I think that some retailers are,” Patterson said, as quoted by the Montreal Gazette.
Discount retailers, dollar stores, and retailers that offer goods at a lower price point than similar-looking products benefit the most from the profusion of these commercial spaces, the markets observer added.
Mid-market retailers have suffered the most. For instance, the Montreal-based Le Château has lost over $100 million in the past three years and is in the process of closing 18 stores this year.
“Consumers are looking for value, so that’s why we’re seeing Winners and Marshalls and Saks Off 5th and those types of stores doing well,” Patterson stated.
Another side effect of these developments is that malls are now forced to explore other options—such as adding full-service restaurants and “lifestyle” providers (e.g. gyms)—to stand out from the crowd.
“Competition is a big thing and malls now are having to see themselves as entertainment centres,” Patterson explained.
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