Retailers Face Challenges in '18

Experts are saying shifting shopping expectations driven by demographic changes, the growing move to online consumerism, and evolving technologies will continue to shake up the Canadian retail scene in 2018.

Some in the Canadian retail sector may be forgiven if they seem glad to see the end of 2017, a year that brought upheaval and closures, and was punctuated by the failure of Sears Canada. The department store chain sought creditor protection in June and ultimately went into a liquidation process that will see it close about 190 stores, ending the jobs of about 15,000 employees.

Another retailer, the venerable Hudson's Bay Co. (TSX: HBC), is also facing challenges in today's competitive environment. The company said in June it was cutting 2,000 jobs as it restructured.

Meanwhile, moves by retail giants Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) continued to shake the market in Canada.

One expert said the most store closures on record in the U.S. was back in 2008, when they hit roughly 6,100 stores. However, this year, he said, that figure is projected to be between 8,500 and 9,000 stores.

Another analyst said online shopping has grown to a point in the U.S. that it is creating casualties in traditional bricks-and-mortar retailers that are weak financially or strategically, or that have not adapted to the new normal. He said the same thing will happen in Canada in a few years, as we are behind the U.S. and the U.K.

Canadians will continue to shop more online through companies such as Amazon, which is increasing its infrastructure in Canada with a new Calgary warehouse and hiring in Vancouver, he said.

Experts conclude that growth in dollars going into online shopping means lower profit margins for bricks-and-mortar stores who are forced to participate in it.