Holiday season set-up | Canada
The growth headliners of late (either to the positive or negative) are seemingly tapped for new ideas that will produce significant gains
Canada’s large retailers are cautiously optimistic this holiday season as average growth in last 6 months remains at 3.0 percent over the previous year. And the industry’s largest commodities are close to flat. But it isn’t all lackluster news – men’s, sporting goods, toys, and footwear all saw significant growth for the year. A set-up of what to expect from the nation’s news-making retailers this year:
Target Canada
There is room for another entry-level general merchandise chain to compete with Walmart. Target has a bit more to do to get things right.
Third quarter comp store sales were up 1.6 percent, looking at just the stores that were open at the same time last year. These results come as the retailer adjusts to the true consumer demand, which is no longer affected by higher-than-normal launch appetite, and sales shifting to new locations. Both are inevitable when opening a lot of stores in a short period.
With strong partnerships across categories, including TOMS, the results for holiday may be good. Pricing, distribution and allocation adjustments have been made. Target may just start to build traction this holiday season.
The turnaround story that isn't
Both Sears and Best Buy are turnaround stories that just haven’t gained momentum. At the end of its third quarter, comp store sales had declined another 9.5 percent at Sears, and Best Buy Canada continues to drag on its US parent.
Product tweaks aren’t doing as much for the retailers as needed. – and neither seem to moving the dial quickly enough on key opportunities.
Hudson's Bay
Hudson’s Bay has formed (and purchased) some strong partnerships to increase traffic in-store, and move its brand forward in the minds of consumers: Topshop, Saks, and the Drake General Store. Adjustments made to its owned business have had a smaller impact in the customers mind (with the exception of The Room).
Comparable store sales in HBC’s Department Store Group (Hudson’s Bay and Lord and Taylor) grew by only 1.1 percent in the last quarter. Most business are dragging at the retailer, with bright spots in smaller categories men’s, home and cosmetics.
The retailer will continue with it’s one-day sales this holiday – hoping that consumer fatigue or competition for the promotion will not hinder its success. Humming along at about the same pace as the industry, we may not see exceptional results from the retailer. The excitement and growth seems to be from the US, Saks OFF Fifth grew by almost 15 percent last quarter.
An unexpected bright spot
Image via Indigo Books & Music
The team at Indigo has been diligently working over the last few years to execute on their transformational strategy, remain alert, and are beginning to see success while the rest of the industry sees modest growth.
READ MORE | Indigo may be the retail star in Canada this holiday season