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2022 Retail Outlook

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research article

The Canadian Retail sector exhibited signs of sheer resilience and recovery during the COVID-19 pandemic. In the second half of 2021, there was robust growth in the labour market and a boost in home-grown and foreign consumer demand. The Bank of Canada (BoC) indicates that the overall economic slack has been absorbed.

Key Insights:

  • The latest numbers from Statistics Canada show that retail sales rose by 8.6% in December 2021 YoY, totaling $57.0 billion. 
  • Global supply chain bottlenecks are putting an upward pressure on prices. According to Statistics Canada, in January 2022, Canadian inflation surpassed 5% for the first time since September 1991, rising 5.1% on a year-over-year basis and up from a 4.8% gain in December 2021.
  • With supply chains bottlenecking again in the first quarter of 2022, Canadian consumers should expect delayed shipments, higher prices, and less stock in their local stores and online.
  • In the Bank of Canada’s Business Outlook Survey for the fourth quarter of 2021, about 4 in 10 firms reported that labour shortages are constraining their sales.
  • In terms of year-over-year change, it is not surprising that spending remained strong among industries related to outfitting and recreation as things began to normalize in 2021 since the onset of the COVID-19 pandemic. Gasoline sales went up dramatically as people began to commute more to work and in general, to spend more time outdoors.
  • As per the latest Statistics Canada data, retail e-commerce sales were down 14.2% year-over-year to $4.1 billion in December 2021, accounting for 6.5% of total retail trade. Out of total retail sales, the share of e-commerce sales fell by 170 basis points YoY. 
  • Retailers that had to shut down temporarily or were required to limit the number of people allowed in their store moved to a "hybrid retail" system where customers could place orders online or by phone before coming to the store to pick up goods.
  • The emergence of conscious consumerism over the past few years is a force that retailers will need to address. From environmental concerns to a desire to see better representation in the products sold, the consumer in 2022 expects the retailer they buy from to be doing better.
  • Canada’s retail vacancy rate declined 100 basis points (bps) from year-end 2020 down to 7.7% in Q4 2021. Vacancy rates for all retail property types have seen vacancy rates declined in 2021. Retail rents across provinces depict a fast rebound in 2021 after a significant dip in 2020. 
  • The long-term strategy for many companies should involve the increased use of Artificial Intelligence. Businesses should continue to train their employees in the machine learning space to grow and innovate, given the frequent shocks in the market.  


2022 Retail Outlook

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For More Information, Please Contact:

Leo Lee

Director, National Research Operations | Canada

Toronto Downtown

Leo Lee is the Director of National Research Operations | Canada and oversees the strategic direction and operations of Colliers Canada Research. He focuses on developing the capabilities of the national research team that leverages Colliers' best-in-class market intelligence and platforms to provide clients with valuable market insights.

Leo joined Colliers International in 2008 and was most recently the Regional Director of Research for Eastern Canada.

He has over 15 years of experience in the real estate market across Canada and New Zealand and draws on his professional experience as a commercial appraiser and real estate consultant.

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