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Shopping Centers Today -> March 2001
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SOFTER LANDING MAY BE IN STORE FOR CANADA
By Susan Thorne
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WHISTLER, B.C. — Canadian shopping centers are doing well and the country can expect a gentler economic slowdown than that in the United States, delegates learned at the ICSC Whistler Conference held here Jan. 23 to 26.
Canadian Division Vice President Seymore Obront reviewed some of the facts of the national situation at the opening session. The year 2000 was an uneven one for retail, he indicated, with sales essentially flat after July.
But cumulative sales figures showed a strong performance, running 6.3% higher in the first 11 months of the year than in the same period in 1999. (The comparable increase in 1999 was 5.4%). Results in specific retail categories were mixed. Drugstore and furniture sales rose slightly (0.5% and 0.3% respectively), but general merchandise and clothing sales each declined by 0.1%.
The 2000 Christmas season appears to have been very favorable for some merchants. Apparel retailer Suzy Shier and bookseller Chapters each showed a 3.4% increase over last year; Sears jumped by 2.5% and Future Shop (electronics) by a substantial 17%. Overall forecasts anticipate across-the-board increases of 3% for Canadian retailers for the 2000 holiday season compared with an average of 2% for the United States.
Watching and waiting
As the American economy cools, the Canadian shopping center industry is watching nervously and wondering what the impact will be north of the border. Obront reminded the audience of the strong influence of Canada’s southern neighbor with a quote from the late Canadian Prime Minister Pierre Trudeau, who compared the relationship to living next to an elephant: "No matter how friendly and even-tempered is the beast, one is affected by every twitch and grunt."Nonetheless, Obront suggested that Canada may slide into recession more gradually than the United States. Third-quarter economic growth in Canada was double that of the United States, and Canadian economic indicators remain strong: Manufacturing is booming, and federal and provincial tax reductions will spur growth further, he said.
Given these factors and the importance of oil and gas in the economy, many economists believe that Canada will have a softer landing than the United States.
Obront touched on other important directions in the Canadian shopping center environment, including continued entry by U.S. retailers into the market (Krispy Kreme and Old Navy are the next anticipated additions) and increased consolidation of retail companies generally; the Future Shop and Indigo offers for bookseller Chapters Inc. underline that trend. As of press time, Indigo’s affiliate Trilogy Retail Enterprises had bought Chapters in a hostile takeover that cost the firm C$121 million.
E-commerce on the rise
Internet retailing also continues to grow, with Canadians now ranked as the world’s highest per-capita users of the Internet — ahead of the United States, Sweden and Finland — according to Computer Industry Almanac, an annual reference guide to the computer industry.Canadian ICSC membership currently stands at 2,381 and attendance at meetings has increased 12% in the past year.
The corridors of the conference, a well-attended event, were filled with energized deal-makers and other delegates.
Speaking after the close of the event, Obront described it as the most successful such conference ICSC Canada has organized to date. "It was phenomenal," he summed up.
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