Canadian retailers will face a challenging 2012, with an influx of foreign competitors, weak consumer sentiment and decreased consumer buying power, according to an Ernst & Young trend forecast released this morning.
“Consumers will continue to focus squarely on price in 2012,” Daniel Baer, Ernst & Young partner and national retail industry leader, said in a press release.
“Retail sales are expected to rise marginally. Meanwhile, higher gas prices, taxes and costs for groceries and certain manufactured goods will further erode buying power and combine to squeeze retailers’ bottom lines.”
The forecast said retailers will also need to contend with the effects of new U.S. competition in the Canadian market and will need to focus on differentiating themselves.
“In 2011, Black Friday and Cyber Monday events were much more common among Canadian retailers, demonstrating the impact of U.S. marketing in Canada,” Baer said.
“Expect Canadian retailers to emulate their U.S. brethren in 2012, particularly through the adoption of social media, more aggressive online strategies and international expansion.”
Additional 2012 retail trends that Ernst & Young is forecasting include:
- online shopping distribution channels, especially from mobile devices, will continue to influence the retail landscape, and retailers will continue to sharpen their online offering;
- social media will increasingly influence how, when and where consumers buy;
- as U.S. retailers continue to enter the Canadian market, retailers will be pressured on real estate and talent; and
- consolidation and restructuring will become more commonplace among retailers in 2021, with some, weakened by recession, needing to restructure or sell.
Jenny Wagler
@JennyWagler_BIV