Experiential Luxury in Canada

2021 DEVELOPMENTS

Experiential luxury continues to struggle under lack of international tourists

Amongst all luxury goods categories, experiential luxury was the worst affected in value terms by the outbreak of COVID-19 in Canada in 2020. The global halt in travel and the collapse in tourism in Canada in the year had a severe impact on experiential luxury, especially for luxury hotels.

Luxury foodservice remains niche even with restrictions easing

Luxury foodservice is yet to emerge from beyond its niche in Canada as demand remains limited to a very small number of upper-income consumers. These consumers have shifted their spending priorities towards goods and services that will make their increased time spent at home more comfortable and entertaining and they also have more time in which they can cook for themselves.

Luxury foodservice brands increasingly likely to enhance luxury shopping experience

Luxury foodservice brands are gravitating to luxury shopping areas as consumers transition back to pre-COVID-19 behaviours, including returning to store-based shopping in greater numbers. Offering foodservice options in luxury stores is increasingly seen as a way to enhance the luxury shopping experience.

PROSPECTS AND OPPORTUNITIES

The road to recovery is likely to be long for experiential luxury

For experiential luxury, value sales are not expected to return to pre-COVID-19 levels until the late forecast period due to lingering consumer fears about becoming infected by COVID-19. This, along with further waves of the virus, will slow the full resumption of international travel as well as the desire to stay in hotels and eat in restaurants.

Take-out and delivery options to remain important for luxury foodservice

Luxury foodservice is set to remain a niche in Canada with its value sales remaining negligible. Its emergence is not expected to be within the forecast period, as foodservice in general was severely negatively impacted by the lockdown period and by consumers’ job losses and employers’ work from home policies.

Pick-up grocery options set to threaten luxury foodservice development

The line between luxury restaurants and upscale grocery stores has become blurred thanks the online food and grocery trend, with this expected to carry over into the early forecast period. For example, Pusateri’s (an upscale grocery store which operates Saks Food Halls at the Saks Fifth Avenue location in Toronto), has started offering online ordering for curb side pick-up of ready-to-eat and ready-to-heat meal kits.