Note to Dejected U.S. Retailers: Malls Are Still Big in Canada
By Sandrine Rastello, Bloomberg News
If you’re a retailer who still believes in brick-and-mortar, consider Canada.
A report by the Retail Council of Canada shows that sales by square foot in the northern nation’s shopping centers beat their U.S. counterparts on average. And that’s in spite of the Canadian dollar’s weakness.
Malls in the U.S., which are losing sales to online shoppers, have more vacancies than north of the border, according to Craig Patterson, author of the study from the Toronto-based industry group. In Canada, higher shipping costs and a low population density have slowed the rise of e-commerce, while winter weather traditionally lures shoppers to indoor malls and food courts, he said.
It helps that the market is less saturated. Canadian shoppers have access to 16.5 square feet of shopping mall per capita, 30 percent less than their U.S. peers. Canadian malls also boast the most visitors, helped, in the case of Toronto’s Eaton Centre, by the connection to offices and transit lines, Patterson said.
Still, malls with the highest sales per square foot, or productivity, are all located in the U.S., usually helped by a higher concentration of luxury stores, or because some are located in tax-free states. Bal Harbour Shops, near Miami, boast sales of $3,185 per square foot, the most among peers. The first Canadian shopping center, Yorkdale, wouldn’t make it into the U.S. top 10. once its sales are converted into dollars.