Shopping is good and B.C. is a good place to shop.
Partner that with relatively low interest rates and strong labour markets and it is easy to see why B.C. is a popular destination for retailers and the investors who work with them.
This week more than 2,000 people came from across North America to Whistler to attend the annual International Council of Shopping Centres conference to network and talk about the state of the retail industry.
In general Canada’s retail sector remains strong despite being buffeted by a robust Canadian dollar and fears about a recession south of the border.
“Various key fundamentals…are still in place in Canada and should help our industry to remain vibrant and continue to grow at a respectable pace in the coming months,” Rene Tremblay told a standing-room only session at the annual International Council of Shopping Centers Conference in Whistler yesterday.
Total retail sales rose 5.7 per cent in the first 11 months of 2007. That is below 2006, considered an exceptional year, which came in at 6.4 per cent.
Tremblay believes that cross border shopping, one of the fall-outs of a strong Canadian dollar, has stabilized now and in general had a modest impact nationally.
“For a few shopping centres that were close to the border it had some impact but it is not dramatic at all,” he said.
“We have to put it into perspective. Naturally when the dollar was at $1.10… for some cities close to the border it had an impact, but things have stabilized and I would say now we are on course to have acceptable sales.”
Western Canada is particularly well placed to weather economic challenges as it heads in 2008 and 2009, said Tremblay, as it is such a popular place for investment and spending.
“As an industry, a lot of developers are very enthusiastic about British Columbia and about the potential of the province,” said Tremblay.
“We see a lot of development projects that are going ahead right now.
“…Developers and retailers have a strong interest for space in British Columbia, it is absolutely incredible.
Western Canada right now is very popular in North America and even when you talk to foreign investors.
“It is a very good market and for a national chain or an international retail chain to open in Vancouver it is a trendy market, people are fashion-orientated and that it is a good place to be.
“I expect in Canada things to be very good, but I expect things in Western Canada to be very, very good.
The strong draw for retailers is not without its challenges in B.C. where a hot construction market is having an impact.
“I have heard that some projects that are really close to starting are pressured right now by increasing costs,” said Tremblay.
Nevertheless, he said, British Columbians should look for shopping centre expansions and upgrades in the coming months and years.
Areas of strength in 2007 included pharmacies where sales as of November had risen by 9.1 per cent – the highest among trade sectors. The furniture sector was also strong at 8.5 per cent, while building and home supplies went up 7.3 per cent.
However, enclosed Canadian mall sales per square foot for non-anchor tenants only went up 3.3 per cent as compared to 5.3 per cent for 2006 and 3.7 per cent for 2005.
“Mall sales productivity has softened in recent months,” said Tremblay.
“Lower prices due to increased competitive pressures related to the level of the Canadian dollar may have had an impact on nominal sales.”