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ICSC - 2003 Western Canada Idea Exchange in Calgary

By Stu Wells         July 8, 2003 

Knock Knock

Who’s There?

Ya

Ya Who?

I must be at the ICSC - 2003 Western Canada Idea Exchange in Calgary.

It is customary during Stampede Week to feature programs heavy on fun, light on substance. ICSC this year is no exception.

The big emphasis this time is on tenant participation. Marcel Proskow, ICSC Western Canada Provincial Director, says a record 50 tenants are registered (thanks in part to free registration for tenants). Congrats to ICSC for permitting it.

The Exhibitors Leasing Lounge seems to be fairly busy and a new concept, the Lease-O-Rama, has been launched to feature expanding retailers, new projects and leasing opportunities.

State of the Industry

After a traditional pancake breakfast, ICSC Canadian Division Vice President (and President and CEO of Ivanhoe Cambridge) Rene Tremblay, summed up 2002 – 2003 as a very interesting year for the retail industry. Low interest rates, a strong housing market, broad economic growth and generally balanced budgets have produced another year of strong economic growth in Canada. For the fourth consecutive year, Canadian GDP has grown faster than that of the US. Rene observes, however, that the rate of job growth is slower than last year. Retail sales started very strong in the year but are weakening. A strengthening Canadian dollar, SARS and continued struggles in the US economy are expected to reduce the rate of growth in Canada for the balance of this year and a slowdown is anticipated.

Clothing, shoes and household furnishing sales have soared in Western Canada while remaining flat for most of the rest of the country.

Rene reports that consolidation in the industry has more or less stopped, at least at the ownership level. While investment capital for shopping centers remains fairly readily available (primarily in the hands of smaller pension funds, REITs and institutions), quality investment opportunities on the ownership side are relatively scarce. Rene expects the Canada Pension Plan Fund to become a huge player over the next several years. Several projects are underway in Western Canada, either re-developments or new, including Market Mall in Calgary, West Edmonton Mall in Edmonton and Metrotown in Burnaby. A number of lifestyle center concepts are underway, including Park Royal in Vancouver and Don Mills and Vaughn Mills, the latter being the first enclosed mall to be built in Canada in 13 years.

Ownership on the retail side has been somewhat in flux, with a number of chains and brands changing hands. D’Aillards is for sale, and Safeway, as a Western Canadian anchor, is considered to be a ripe target for a change of ownership.

Retail Strategies

The influx of US and European retailers into Western Canada continues, including major forays by Best Buy, Old Navy, Home Sense, Linen & Things, Skechers, Children’s Place, Bang & Olefsson and many others. Rene reports that approximately 180 US retail chains have a toe-hold in Canada now, along with at least two dozen European ones.

New blood and increased competition is fostering new formats, like stand alone Sears Grand store concept. Walmart (now with 213 stores in Canada) and Target are expected to continue to aggressively expand. As effectively as Walmart has invaded the grocery business in the US, grocers in Canada are adopting retail growth strategies which sees them competing with Zellers and drugstores for traditional business. I was surprised to hear that Loblaws has become the third largest seller of children’s clothing in Canada. I guess it shouldn’t be a surprise then that Zellers is getting into selling refrigerated and frozen foods. Emerging grocery store concepts are evolving, including the introduction of cooking schools, fitness centers and even hosting kids’ birthday parties. Canadian Tire is rolling out its new Concept 20/20 stores with home décor, housewares and furniture, while Home Depot is doing the same with its new Design Place concept. Focusing on the growth of existing brands coupled with innovation seems to be not only desireable, but necessary for success with ever increasing competition.

Don Cooper, a speaking professional and former sports equipment manufacturer (is there anyone who hasn’t owned a Cooper baseball glove) and retailer (Alive and Well) gave an energetic and passionate motivational presentation on the importance of retailers understanding their customers and building loyalty. He spoke to retailers from the heart about the need to be noticed and remembered, understood and differentiated, trusted and preferred in order to be successful. He offered a number of key insights into Human Marketing, a trademarked concept of Don’s. Fascinating stuff and I couldn’t possibly do it justice to attempt to summarize it here.

Lunch featured a heartfelt address from John Furlong, President and CEO of the Vancouver 2010 Bid Corporation. He provided a glimpse of the 5 years of unstinting dedication, determination and creativity of the team and the almost unimaginable challenges that had to be faced to achieve Number 1. We were treated to two of the videos the team used to sway opinion around the world. Wonderful and stirring images to the sounds of Bryan Adams. Definitely worth a look if you have the chance. Makes you proud to be a Canadian. John deserved and got a standing ovation.

Summary

All in all, a fine Calgary show. I feel I learned something, and had fun to boot. (Let’s not talk about golf). Calgary deserves its reputation as a friendly people place. From an industry perspective, and despite widespread concern in the industry last year, 2002 turned out to be an extraordinary year in Canada. The year 2003 will be strong also, characterized by continued and rapid evolution in retailing.

- Stu Wells

 

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