In the vibrant Canadian retail market, numerous companies compete for consumer spending, offering a wide range of products and services. From groceries and household items to clothing, electronics, and home renovation materials, these retail giants play a significant role in shaping the economy of the country. Let's explore the top retail companies in Canada, their market dominance, growth trends, and their impact on the Canadian retail landscape. In this article, we will delve into the top retail companies in Canada, analyzing their market share, revenue, and growth patterns.
The CSCA Retail 100
The CSCA Retail 100, created by the Centre for the Study of Commercial Activity at Ryerson University, provides insights into the top 100 retail organizations operating in Canada. These rankings are based on estimated annual retail sales in fiscal 2018/2019. The Retail 100 includes both Retail Conglomerates (RCG) and the Retail Chains (RCH) they control, giving us a comprehensive understanding of the upper tier of retailers in Canada.
Dominance of Major Retail Conglomerates
A few large store-based conglomerates exert significant control over the Canadian non-auto retail sales environment. In 2018, the top 100 retail conglomerates accounted for nearly 70% of non-automotive retail sales in Canada, showcasing their dominance. However, this percentage declined slightly from 71.4% in 2014, indicating a shifting landscape. Analyzing the marketing strategies and positioning of these top players provides valuable insights into the ongoing processes shaping Canada's retail economy.
The Top 10 Retail Conglomerates in Canada
Let's take a closer look at the top 10 retail conglomerates in Canada based on their estimated annual retail sales in fiscal 2018/2019:
These top 10 retail conglomerates dominate the Canadian retail landscape, accounting for a significant portion of the country's non-auto retail sales. Their presence is felt across various sectors, including groceries, general merchandise, health and personal care, and home improvement.
1. George Weston Ltd.
George Weston Ltd. is a Canadian food processing and distribution company. It operates through its subsidiary, Loblaw Companies Limited, which is one of the largest food and pharmacy retailers in Canada, including Shoppers Drug Mart, The Real Canadian Superstore, Loblaws.
2. Costco Inc.
Costco Inc. is a global retail giant, known for its membership-based warehouse clubs. It offers a wide range of merchandise, including groceries, electronics, and household goods at competitive prices.
3. Empire Company Ltd.
Empire Company Ltd. is a Canadian food retailing and real estate company. It operates through its subsidiary, Sobeys, Safeway, IGA, Farm Boy which is one of the leading grocery retailers in Canada.
4. Walmart Stores Inc.
Walmart Stores Inc. is a multinational retail corporation known for its discount department stores and hypermarkets. It offers a diverse range of products, including groceries, clothing, electronics, and more.
5. Metro Inc.
Metro Inc. is a Canadian food retailer and distributor. It operates a network of supermarkets and discount stores, offering a variety of grocery items and household products. A major player in the food retail sector, Metro operates in Quebec and Ontario under several banners, including Metro, Super C, and Food Basics, combining value and quality to appeal to a broad consumer base.
6. Canadian Tire Corporation
Canadian Tire Corporation is a retail company that operates through various banners, including Canadian Tire, Mark's, and SportChek. It offers a wide range of automotive, hardware, sports, and home products.
7. McKesson Corporation
McKesson Corporation is a global healthcare company with operations in pharmaceutical distribution and healthcare technology. It provides pharmaceuticals, medical supplies, and health information technology solutions. It operates through its subsidiary, IDA Pharmacy, Uniprix and Rexall Drug Store.
8. Lowe’s Companies
Lowe's Companies, Inc. is a home improvement retailer offering a diverse range of products for maintenance, repair, remodeling, and decorating. It operates numerous stores across North America. Rona Inc. was acquired by Lowe's Companies, Inc. but maintaining its separate brand identity in Canada, Rona serves as one of the country's largest home improvement retailers, with a strong presence in Quebec
9. The Home Depot, Inc.
The Home Depot, Inc. is a leading home improvement retailer specializing in construction products, tools, and services. Catering to the DIY and professional market, The Home Depot's massive stores and comprehensive product assortment continue to be a draw for consumers looking for home improvement solutions.
10. Home Hardware Stores Limited
Home Hardware Stores Limited is a Canadian retailer-owned cooperative that offers a wide range of home improvement and hardware products. It operates under the Home Hardware banner, serving communities across Canada.
Major Retailers Shaping the Market
The dominance of these retail conglomerates is further highlighted by the fact that the top 10 conglomerates controlled 48% of national retail sales in 2018, reflecting a steady increase from 43% in 2014. While the overall contribution of the top 100 retail conglomerates slightly decreased from 2014 to 2018, the market share of the top 10 remained relatively stable.
During this period, there were significant changes in the RCG100 listing due to store closures and merger/acquisition activities. Seven conglomerate closures occurred between 2014 and 2018, with the most significant ones being Sears and Target. Additionally, mergers and acquisitions impacted sales, particularly among the four largest conglomerates: George Weston Ltd., Empire Company Ltd., Metro Inc., and McKesson Corporation.
Shifting Canadian Retail Control
Canadian headquartered companies still dominate the RCG100, accounting for the majority of sales. However, their share decreased by 3.4 percentage points from 2014 to 2018. In contrast, stores headquartered in the US increased their share by 1.9 percentage points, and those from other countries increased by 1.5 percentage points. In 2018, the RCH100 controlled 62.2% of Canada's non-auto retail sales.
The largest portion of these sales is in the groceries and beverage stores category, which is dominated by Canadian headquartered chains. The general merchandise category is primarily led by US headquartered operations, while health and personal care are dominated by Canadian headquartered businesses.
The Rise of Online Sales
With the advent of e-commerce, online sales have been steadily growing in Canada. While the CSCA Retail 100 captures some of the online activities through store-based sales reporting, a significant portion of e-retail sales remains unreported. For example, Amazon, with its estimated sales of C$16.6 billion in Canada in 2018, would rank as the fifth-largest "retail conglomerate" in the country.
Based on Environics Analytics' ClickSpend data, online activity accounted for $35.3 billion in household expenditures in 2018, representing 11.6% of expenditures in categories such as entertainment, electronics, clothing/shoes/children, sports & leisure, furniture & household, health & personal care, and groceries/food/alcohol. The highest shares of online expenditure were in entertainment and electronics, while groceries/food/alcohol had the lowest share.
The Fastest-Growing Retail Brands
In addition to the established retail conglomerates, several fast-growing retail brands have made significant strides in the Canadian market. HomeSense, Winners, and Dollarama have emerged as the top three highest growing brands, reflecting the increasing demand for convenience and value among Canadian shoppers.
HomeSense, known for its discounted home goods, experienced a remarkable 38% growth. Winners, a popular off-price clothing retailer, saw a growth of 32%. Dollarama, a chain of dollar stores, also demonstrated strong growth with a 19% increase in brand value.
Success Stories: Lululemon and Aritzia
Lululemon, a multinational athletic apparel retailer, achieved exceptional performance, entering the top three for the first time and increasing its brand value by 8%. The brand's success can be attributed to strong financial results and international expansion. With a commitment to manufacturing clothes from sustainable materials by 2030, Lululemon exemplifies the importance of having a strong purpose and contributing to the greater good of society.
Another notable brand is Aritzia, a Canadian apparel company that stands out as the most different brand in the ranking. With plenty of room for expansion, Aritzia has the potential to further establish its presence in the Canadian market.
The Most Valuable Canadian Brands
The Kantar BrandZ Top 40 Most Valuable Canadian Brands ranking provides valuable insights into the performance and value of Canadian brands. RBC, a financial services brand, retained its position as the most valuable Canadian brand in 2023, followed by TD. These financial services brands play a dominant role, with twelve brands accounting for over half of the total ranking's value.
Other notable brands in the top 10 include Lululemon, Bell, Telus, Bank of Montreal, Rogers, Scotiabank, CIBC, and Dollarama. These brands showcase the diverse sectors that contribute to the overall value of Canadian brands.
Trends Shaping the Canadian Retail Landscape
Several trends are shaping the Canadian retail landscape. Green fashion, characterized by sustainable materials and ethical production methods, is a growing sector in Canada. The country is becoming a leader in this space, with numerous green fashion start-ups and brands manufacturing clothes using low-impact fabrics.
Inclusive design is another important trend, considering that 22% of the Canadian population lives with disabilities. Brands that prioritize inclusive design and create products accessible to all can tap into a wider market and drive innovation.
Health and wellbeing are also significant considerations. Canadian brands have been at the forefront of destigmatizing mental health issues and supporting mental health initiatives. For example, Bell's "Let's Talk" campaign has played a vital role in mainstreaming discussions about mental health.
Finally, the Canadian government's investments in electric vehicles (EVs) and infrastructure position the country as a prime market for automotive and technology brands in the electric mobility sector.
Conclusion
Canada's retail industry is dynamic, competitive, and constantly evolving. The top retail companies in the country exert significant influence over the market, shaping consumer trends and economic growth. Understanding the dominance, growth patterns, and emerging trends in the Canadian retail landscape is crucial for businesses aiming to thrive in this vibrant market. As consumer preferences continue to evolve, brands that prioritize convenience, value, sustainability, inclusivity, and purpose are well-positioned to succeed in the Canadian retail market.
*Note: The information provided in this article is based on various sources, including the CSCA Retail 100 report, the Kantar BrandZ Top 40 Most Valuable Canadian Brands ranking, and industry insights.
