Figure 26 Store Counts for Canada

The strongest growth is in the non-chain sector, averaging 1.9% per year from 1999 through 2003. This compares to an average growth rate of only 0.9% per year for the formally-defined chains component. It is important to recognize that the concept of non-chain simply means that the units are defined to be separate businesses by ownership. Many of the non-chain locations are franchises or tied to buying groups or banner programs with tied suppliers or other forms of business arrangement. Statistics Canada attempts to determine whether stores are occupied by franchisees. However, the results of the questions have proved somewhat unstable over time. The statistical appendix includes a table with the available detail. However, the trends should be evaluated with caution. The data indicate that franchise ownership has declined rather quickly. There has been an apparent shift to the "unclassified" category which declined to answer the relevant questions.

The next chart (Figure 27) presents the same data by region in Canada. Excluding the northern territories, Ontario has enjoyed the strongest proportionate growth followed by Alberta and B.C.

Figure 27 Growth in Store Counts by Province 1999-2003

Ontario, the province with the largest retail sector, led the pack with an average annual growth rate of 3.2%, well above the national average of roughly 2%. Ontario accounted for almost 8,900 locations or 57.6% of the total increase since 1999. Alberta and BC are only slightly behind in proportionate terms at 2.9% and 2.8% per year over the period. However, together, the two provinces added only slightly more than 5,000 locations over the period. In per capita terms, Ontario added slightly more stores than Alberta but less than B.C.

The next chart (Figure 28) shows the average growth rate in the number of store locations over the period from 1999 through 2003. The number of locations in the various trade group categories generally expanded over the period. The major exception is sporting and hobby category. The significant expansion in home furnishing stores as well as speciality building materials stores highlights the importance of housing-related expenditure to the retail sector.

Figure 28 Growth in Locations by Trade Group — 1999-2003

The limited expansion in clothing locations as well as gas stations probably indicates saturation in those categories and possibly some consolidation forced by increased competition. Earlier, the charts indicated that clothing was not a particularly high profit sector which may also explain some of the apparently weak growth.

As noted above, there as been substantially faster expansion in non-chain locations than in chain locations. The Annual Retail Trade Survey provides small-area location data for the chain-store format. The next table (Figure 29) shows the largest urban markets.

As would be expected, the absolute increase in number of chain locations rises with the size of the market. However, growth rates do not necessary vary with market size. Proportionately growth in Vancouver and Quebec City was noticeably below the national average of 0.9% in chain location growth over the period 2001-03. In contrast, Halifax, Kitchener and Windsor substantially exceeded the average.

Ranking the markets by proportionate growth rather than size brings another perspective to the analysis. The next figure indicates growth that was substantially above average in some of the smaller urban markets.

Although the numbers of locations were small, the growth would be significant in these locations. The important message is that retail is a critical element of the urban landscape everywhere.