Online retail started slow in Canada, but now it’s making shopping mall space obsolete at a rapid pace.
In fact, by 2014, online shopping had eliminated the need for 76.7 million of shopping mall space — the equivalent of all the malls in Vancouver, Halifax, Ottawa and Victoria, commercial real estate agency Colliers said in a new report.
The West Edmonton Mall in Edmonton, Alta., on Sunday, Feb. 22, 2015. (Photo: Canadian Press/Ian Jackson)
Online shopping sales growth made 14.8 million square feet of mall space redundant between 2012 and 2014 alone. This amount of space is nearly equivalent to all the shopping malls in the Ottawa area.
But the really “worrying statistic” for Canadian malls is that Canada is still catching up to other countries in online retail, Colliers said in its fall retail outlook.
In the U.S., online sales from established brick-and-mortar retailers amounts to 10 per cent of retail sales; in Canada online was only 4.7 per cent of retail sales in 2014.
Crowds of shoppers at Toronto's Eaton Centre. (Photo: Oleksiy Maksymenko via Getty Images)
But Canadian malls nevertheless remain “strong,” Colliers said.
That’s especially true in major markets, “where luxury brands like Saks, Nordstrom and Holt Renfrew are occupying huge anchor spaces; and Hudson’s Bay and Simon continue to hold their own.”
Canada’s retail sector hasn’t performed all that well this year; data from StatsCan released Friday showed there has been no growth in the retail sector since the start of the year.
But Colliers sees that changing with the holiday shopping rush, which will help Canada to a projected 4.8-per-cent increase in retail sales in 2016, the report said.
It sees retail sales rising in every province in Canada this year, except Alberta, where an oil-led recession is expected to shrink sales by 0.9 per cent.