2018 year in review: Mixed results for B.C. retail

Sales growth in the province slowed, but mall expansions continued

A rumoured sale of the iconic Hudson's Bay building in downtown Vancouver failed to materialize | Glen Korstrom

Canadian retail sales were up a modest 3.4% during 2018’s first nine months, compared with a year earlier – a rate that was about half of the 6.7% annual growth rate that retailers enjoyed countrywide in 2017.

Trends such as the rise of e-commerce continued to hurt bricks-and-mortar retailers, while mall owners sought to rejuvenate their properties with more experiences for shoppers.

Here are five of the biggest retail happenings in B.C. during 2018:

 

Over-the-counter cannabis in B.C.

 

On October 17, after 95 years of prohibition, Canadian retailers were again allowed to sell cannabis. B.C. fared better than some provinces – such as Ontario, which will have no bricks-and-mortar stores until at least April – and had one government store in Kamloops open for business on Day 1 of cannabis legalization. The province has since authorized the operations of two private stores, both of which are in the southeastern town of Kimberley.

 

Outlet expansion

 

The successful 240,000-square-foot McArthurGlen Designer Outlet Vancouver Airport mall launched construction of a smaller-than-expected, yet long-awaited, 84,000-square-foot second phase in March and intends to open that space in spring 2019. Operators of the mall, which opened to huge crowds in mid-2015, had originally said that the mall would add a 140,000-square-foot second phase by 2017.

 

Tsawwassen megamall

 

Tsawwassen Commons started to take shape in 2018, with many retailers signing leases and launching operations. The big-box strip mall’s 303,000-square-foot first phase was 91% leased by spring 2018 to stores such as Canadian Tire, Rona and Walmart, while construction had started on parts of what was originally intended to be a 217,500-square-foot Phase 2. The mall is across the street from the 1.2-million-square-foot Tsawwassen Mills.

 

Uplifting lululemon

 

Lululemon Athletica Inc. (Nasdaq:LULU), the largest B.C.-based retailer ranked by market capitalization, had a successful and eventful year, complete with new CEO Calvin McDonald taking the corporate reins in August. The next month, the company’s shares hit an all-time high, and Lululemon’s latest projections were for it to generate US$3.1 billion in sales during the year.

 

No Bay buyer

Rumours swirled in May that Hudson’s Bay Co. (TSX:HBC) and partner RioCan Real Estate Investment Trust (TSX:REI.UN) were set to sell HBC’s flagship Vancouver store, at the corner of Georgia and Granville streets, to an Asian buyer for $675 million. The deal, however, fell through, and HBC and RioCan are now said to be considering redeveloping the property on their own. •

 

gkorstrom@biv.com

@GlenKorstrom