Department stores was heavily affected by the sharp drop in tourism, reduced store traffic and declining discretionary spending in light of the Coronavirus (COVID-19) pandemic. Department stores suffered as they did not have an efficient digital strategy to overcome pandemic challenges.
Department stores are lagging behind in e-commerce capabilities and rely on more on in-store sales. To negate retail current value sales losses to other channels in the two years prior to COVID-19 and exacerbated by the pandemic, department stores owners engaged in more promotional activities, such as warehouse sales.
In the second half of 2021, department stores rapidly entered the recovery period. Shopping malls started to operate at full capacity, and more consumers began to feel comfortable visiting a store in person.
Department stores is expected to see a slower recovery than many other retailing channels, partly because of the sluggish upturn in international travel, the ongoing shift to e-commerce and other retailers and the residual economic effects of the COVID-19 pandemic. Indeed, marginal retail value (constant 2021 prices) growth in the short term is predicted to give way to small decreases over the second half of the forecast period.
Continuing the trend from 2021, department stores will try to enhance or reinvent their digital strategies to remain relevant in the post-COVID-19 period. With the expected growth in experiential expenditure, department stores will try to use their physical store floor as a means of differentiation from operators in competing channels.
The closure of Sears in 2018 benefited other mid-priced retailers, but over the forecast period it is generally expected that they will continue to face many of the same trends that led to the demise of Sears. The most important is the overall polarisation of retailing in Canada, which favours economy retailers like Dollarama and Giant Tiger, as well as high-end players offering luxury products, including higher-end department stores like Holt Renfrew.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Canada with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Department stores are chained or independent retail outlets that usually exceed 2,500 sq metres of selling space, are typically in high-street or shopping mall locations, and have a primary focus on selling a range of non-food/drink/tobacco merchandise across several categories in different departments. Department stores usually have a mid-to-upper price positioning. Example brands include Macy’s, Marks & Spencer, and Takashimaya.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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