Unde rsta nding Ma jor E c onomic , De mog ra phic And Consume r T re nds In Ca na da John Williams December 1, 2011
Outline The Canadian Population The Canadian Population Retail Growth and Influence on Real Estate The New Entrants The Technology Effect In Closing I Cl i 2
T T he Ca na dia n Popula tion he Ca na dia n Popula tion
Immig ra tion is Driving Ca na dia n Popula tion Immig ra tion is Driving Ca na dia n Popula tion Growth … Source: Statistics Canada - Quarterly aggregated demographic components, July to September, 1975 to 2009, Canada
… a nd it Will be More so in the F d it Will b M i th F t utur e Source: Statistics Canada - Migratory and natural increase of the Canadian population, 1956 to 2056
T T h C he Curre nt Pic ture t Pi t I mmigrants % Change 35 Population less I mmigrants 2001 to 2006 30 5.44 5 44 6 19 6.19 + 14% + 14% 25 llions 20 Mi 15 25.66 24.79 10 10 5 0 2001 2006 6 Source: Statistics Canada
And T And T he y Are E he y Are E mig ra ting F mig ra ting F rom rom… T op T e n Pla c e s of Birth for Immig ra nts T o Ca na da - (1991 to 2001 vs. 2001 to 2006) 16% 14% 1991-2001 14% 2001-2006 12% 12% 11% 10% 9% 8% 7% 7% 7% 6% 5% 4% 4% 3% 3% 3% 3% 3% 3% 2% 2% 2% 1% 1% 1% 1% 1% 0% Phillipines Sri Lanka Pakistan U.S China India Hong Kong Taiwan Iran Poland H 7 Source: Statistics Canada
And Re siding in… Percent of Total Population 8 Source: Statistics Canada 2006 Census & CSCA
With Proje c te d Spe nding Implic a tions of With Proje c te d Spe nding Implic a tions of Ca na dia n Popula tion Gr owth (2006–2026) 2,500 2,239 ow th ds) 2,000 t d ulation Gro ( Thousand dlers and placement eens and Retirees ri-Cycles 1,501 pending pending Career 1,351 Teens 1,500 ees C Twe Sp Sp ected Popu Active 1 000 1,000 0 6 -2 0 2 6 ( Rep Pre-Retire s Elders Tod Tr 500 184 179 184 2 0 0 P Proje 0 -302 -500 < 9 < 9 10-19 10 19 20-34 20 34 35 54 35-54 55 64 55-64 65 75 65-75 75 + 75 + Age Cohorts 9 Source: Statistics Canada
Re ta il Growth a nd Its Re a l E sta te Influe nc e
Ca na da ’s Re ta il Sa le s Ha ve He ld UP… 11 Sources: Statistics Canada
Store T Store T ype s: L ype s: L e a de rs vs L e a de rs vs. L a g g a rds a g g a rds (CAGR 2005–2010) – Ca na da Leaders Laggards 12 Sources: Statistics Canada
Re ta il Re a l E Re ta il Re a l E sta te F sta te F orma t Growth* orma t Growth*… (Gre a te r T oronto Are a 2001 vs. 2009) 0s) r Area (000 Retail Floo Growth Rate 9% 11% 78% 45% Sources: Centre for the Study of Commercial Activity – Ryerson University – Report 2011-02 13 * Floor Area (1,000s)
T he Cha ng ing Re ta il L a ndsc a pe – Ne w E ntra nts
T T he Ne w E he Ne w E ntra nts ntra nts… (Appa re l a nd Ge ne ra l Me rc ha ndise ) 2000 – Major 2000 Players + Recent* Considering** Players + New Entrants Apparel & • Le Chateau • Le Chateau, Roots • Roots • Eddie Bauer Accessories • Eddie Bauer • The Gap Co. • Concepts • Reitman’s • Suzy Shier Suzy Shier • American Eagle • Walmart, Sears • Walmart, Sears, The Bay, , , , y, General Merchandise • The Bay, Zellers Zellers * Launched in Canada within the past 5 years 15 ** Retailer has not confirmed entry into Canadian market
And T he ir Antic ipa te d Impa c t… . New Entrants $16 } $80 } $80 s) (in billions $7.6 ( *Estimated by JCWG 16 NOTE: Retail sales for 2010 for All Stores less Autom otive w ere over $293 billion dollars
T he T a rg e t E ffe c t – An Ove rvie w 1,740 stores 120,000 sq. ft. stores Store sales = $65.6 Billion E-comm sales =$1.2 Billion* Household essentials Hardlines Apparel & accessories Home furnishings Home furnishings Food & pet supplies 17 * 2010 Annual Report
Ope ra tiona l Ove rvie w Ope ra tiona l Ove rvie w S.W.O.T Key Lines of Business* Strengths Opportunities Brand awareness Extend brand • • Innovative Test & refine • • Trendy/up-to-date international strategy • Open multiple locations simultaneously Open multiple locations simultaneously Test small format stores~ Test small format stores~ • • • • Presentation of merchandise Introduce E-commerce • • Carries both private~~and national • brands Financially sound • Can leverage online approach g pp • Will take share from WM, Winners & • Sears, The Bay and Loblaws (Joe Fresh) Weaknesses Threats Limited knowledge of market place Will experience • • First international market significant competition • Assuming Canadians will shop in same from established players • manner as U.S. consumers manner as U.S. consumers Ability to obtain desired real estate • * 2010 Annual Report 18 ~ Set to launch small format store in Chicago in 2012 ~~ Generates ½ of revenue from Private Brands
T T he T he T e c hnolog y E e c hnolog y E ffe c t ffe c t
Hig h Inte rne t Ac c e ss Ac ross All Me diums I nternet Access ( all locations) Hom e I nternet cent ( % ) Access Perc W ireless Access Sm artphone PDAs 20 Source: Ipsos Reid
Ca na dia ns Buying More Online $15 300 $15,300 $15 071 $15,071 $16,000 $12,772 $14,000 $12,000 $7,924 $10,000 $8,000 $6,000 $4 000 $4,000 $2,000 $0 $0 2005 2007 2009 2010 CAGR (14% )* Source: Statistics Canada 21 * Includes Travel
S Sma r t h tphone Pe ne tr P t a tion Inc re a sing ti I i 1 in 3 mobile devices in Canada is a smartphone 22 *Source: Comscore
A Glimpse of the F A Glimpse of the F uture uture 23
Both Se a rs a nd P&G a re Also E Both Se a rs a nd P&G a re Also E xpe rime nting xpe rime nting with the F uture … Sears Holdings enters the P&G takes to the subways future of shopping with to sell goods in m obile walls* Prauge, Czech Republic 24 *Source: RetailingToday.com – Nov 2011
In Closing In Closing
Wha t Do T Wha t Do T he se Individua ls Ha ve In he se Individua ls Ha ve In Common? Tim othy Eaton Sol Price Jeff Bezos 26
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Thank you. The R etail S hop. p Chicago, Toronto www.j cwg.com (416) 921-4181 John Williams j williams@ j cwg.com
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