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#Breaking: The Most Newsworthy Canadian Retail Stories of 2020
December 03, 2020
It’s hard to recall a more “eventful” year than 2020. From a global pandemic, to civil unrest sparked by police brutality, to a nail-biting U.S. election, the echoes of 2020 will reverberate for many years to come.
The retail sector certainly did not go unscathed. The economic impact of COVID-19 hastened the demise of many merchants—big and small—and we are still guessing as to its after-effects, and how it may have impacted the future of consumer behaviour, business, and everyday life.
As we reach the final weeks of this impactful year, let’s recap some of the retail sector’s most newsworthy stories of 2020.
A record number of stores close or move online.
Before the pandemic took root in Canada, some companies were already closing up shop.
- Lowe’s Canada closed 34 underperforming Lowe’s and Rona stores.
- Bose shut down all 119 locations across North America, Europe, Japan, and Australia.
- Pier 1 Imports closed 450 stores across North America, including all 67 locations in Canada.
- Carlton Cards and Papyrus shuttered all North American locations, including its 78 Canadian stores.
By the spring, when Canadians were gripped with the first wave of the pandemic, other stores announced financial trouble, closures, and a permanent focus on e-commerce.
- Reitmans and ALDO both filed for credit protection. ALDO’s CEO David Bensadoun noted, “the impact of the COVID-19 pandemic has put too much pressure on our business and our cash flows.” ALDO will close up to 40% of its stores in Canada.
- Addition-Elle and Thyme Maternity permanently closed all 131 stores in Canada. LE CHÂTEAU followed suit and is winding down operations.
- Henry’s, a Canadian camera store, announced that it would close seven of its 29 stores across Canada, citing the pressure of the pandemic.
- David’s Tea closed 166 retail locations in Canada and all 42 in the U.S. They continue to sell online and have recently announced that they will re-open 18 locations in Canada.
- Lingerie brand La Senza will close 17 stores across Canada.
- Bed Bath & Beyond announced that the pandemic shutdown cut their sales in half. It will close almost 20% of its stores in the U.S. and Canada over the next two years.
- Justice, Loft, and Ann Taylor will close all stores in Canada as part of its bankruptcy proceedings.
- Health and nutrition retailer GNC will close 29 of its 200 locations in Canada.
- Mendocino filed for insolvency and announced that it will close most or all of its 28 stores in Southern Ontario. It will focus on e-commerce.
- Naturalizer Shoes will close all 60 Canadian stores early next year and some in the U.S.
- PetValu announced it will close all U.S. stores. All 600 Canadian stores will remain open.
Online shopping takes the lead.
With dozens of big brands and small businesses crying uncle under the weight of pandemic-induced shutdowns, the real winners of 2020 made a swift move to, or doubled-down on, e-commerce. Online sales are expected to hit an all-time record this year: “Statistics Canada reports that 2020 is on pace to beat 2019’s total e-commerce sales of $305 billion, a figure that’s more than doubled since 2013 and includes business-to-business sales as well as retail purchase,” reported CTV News.
According to Google Canada research, 65% of Canadians plan to shop online more this year than they have in previous years. With Canada’s largest city and its neighbour, Peel Region, under lockdown until at least December 21st, there will be millions of consumers buying online or doing curbside pickup this holiday season.
Payment options explode in popularity.
Statistics Canada reported in October that there are 1.8 million officially unemployed people in October, up from 1.2 million in February. An additional 433,000 people have a job but are working less than half of what they normally do because of the pandemic. And almost a quarter of 826,000 part-time workers said they’d rather be working a full-time job but can’t find one.
The economic effects of the pandemic have clearly created financial restraints in many Canadian households. One way retailers can ease financial burdens for consumers is by providing flexible payment options. PayBright’s Canadian holiday consumer report found that 52% of respondents polled indicated a desire for flexible, low- to no-interest payment alternatives at checkout, both in-store and online.
And more merchants than ever are getting on board. Some of the 7,500+ retailers offering PayBright payment plans to customers include Hudson’s Bay, Sephora, Wayfair, Groupe Dynamite, Dyson, Samsung, Oakley, Steve Madden, Samsung, and Endy.
And, as merchants see the value of offering diverse payment options for customers and for business, more retailers are being added to the PayBright Shop Directory all the time.
Privacy becomes a bigger concern for Canadian shoppers.
The privacy of 5 million shoppers was breached when one of North America’s largest commercial real estate companies embedded cameras inside their digital information kiosks at 12 shopping malls across Canada, reports the federal, Alberta, and BC Privacy Commissioners.
The kiosks used facial recognition technology without consumers’ awareness or consent to analyze the age and gender of shoppers. It did not intend to identify individual customers or collect personal information, simply understand buying patterns and habits. However, while the images were deleted, investigators found that the biometric information was being stored in a centralized database by a third party. The chain says it was unaware that a database of biometric information existed, which raises questions about how it could be used.
The company has removed the cameras from digital directory kiosks and says they have deleted all information associated with the video analytics technology.
Home goods and hobby categories thrive.
As more Canadians worked from home and stayed at home during mandated lockdowns, there was a real shift in what they chose to purchase. Athleisure, home goods (remember toilet paper hoarding?), kitchen accessories, and lots and lots of groceries.
These spending habits saw grocery chains like Loblaw beat quarterly expectations and online companies like furniture retailer Wayfair double its rate of revenue growth.
With vaccines on the horizon and a Canadian population that will be positively itching to put 2020 behind them, the future of retail could hold some surprises. While we can expect that e-commerce will continue to dominate, it’ll be interesting to see how retailers can lure customers back into the remaining brick-and-mortar stores.
After a year like this one, it’s clear that anything can happen.
This article is provided for informational purposes only. It is not an exhaustive review of this topic. The content is not financial or investment advice. No professional relationship of any kind is formed between you and PayBright. While we have obtained or compiled this information from sources we believe to be reliable, we cannot and do not guarantee its accuracy. We recommend that you consult your personal finance professional before taking any action related to this information. PayBright is a provider of Buy Now, Pay Later (BNPL) solutions. BNPL providers offer plans with a variety of terms and conditions, including interest rates, fees, and penalties, and have different standards for qualifying for loans. Laws and regulations governing BNPL providers vary by jurisdiction. We recommend that you compare and contrast plans, read the fine print, and conduct detailed research into any BNPL provider before using their services.
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