BY CHRISTOPHER DANIEL and TONY HERNANDEZ
THE CSCA Retail 100, created by the Centre for the Study of Commercial Activity (CSCA) at Ryerson University, brings you the top 100 retail conglomerates operating in Canada as ranked by total estimated annual retail sales in fiscal 2016. This top echelon of retailers in Canada are important to understand on their own since many are organizations whose economies of scale enable them to exert a significant influence on Canada’s retail economy. The top 100 retail conglomerates account for more than 75 per cent of non-automotive retail sales in Canada. Considering the control they exert, understanding the marketing strategies and positioning that these top 100 retail players adopt provides insight into the ongoing processes that are continuously shaping Canada’s retail economy.
CSCA Retail 100 Profiles: Fiscal 2016
The top 100 retail conglomerates in Canada collectively operated 405 retail chains, controlled $265 billion in total retail sales, and accounted for just over 75 per cent of non-automotive retail sales in Canada in Fiscal 2016. The CSCA Retail 100 clearly illustrates that the top conglomerates account for the large majority of Canada’s retail economy. For example, the top three conglomerates (Weston Group, Wal-Mart Stores, Inc., and Empire Company Limited) account for 29 per cent of total non-automotive retail sales in Canada. This illustrates that a significant share of Canada’s retail buying power is concentrated in the hands of a small number of very large retail organizations.
In addition to these top three conglomerates, there were 32 organizations with at least $1 billion in total sales, and this ‘Billion Dollar Club’ accounted for 66 per cent, or $235 billion, of non-automotive retail sales in Canada for 2016. These top retailers also controlled a network of approximately 20,000 stores and accounted for almost 432 million square feet of retail store space. Overall, the group accounted for 89 per cent of total CSCA Retail 100 sales, 67 per cent of total Canadian non-automotive sales, and 43 per cent of total Canadian retail sales in 2016.
2016 Conglomerate Rank Changes
There were several important changes in the 2016 rankings of the CSCA Retail 100. Some of the largest gains and losses in rank were primarily due to structural changes such as mergers and acquisitions, though many were due to actual gains or losses in reported or estimated performance.
The top rank increases in 2016 were Nordstrom, Inc. (+33), Lowe’s Companies Inc. (+18), Mountain Equipment Co-operative (+14), Farm Boy Inc. (+12), Carter’s, Inc. (+11). After opening its first three stores in 2015, Nordstrom continued its organic Canadian expansion by increasing its footprint to five stores. Openings at the Toronto Eaton Centre and Yorkdale mall gave Nordstrom a significant presence in two of the largest super regional shopping centres in Canada’s largest market, increased its Canadian square-footage to 972 thousand and pushed its estimated Canadian retail sales to $590 million. Lowe’s Companies Inc. made major headlines in 2016 as a result of their long-pursued acquisition of Rona Inc. The addition of the 12 Rona home improvement banners catapulted Lowe’s into the top 10 retailers in Canada and added close to $5.5 billion in network retail sales, putting Lowe’s just barely one spot ahead of Home Depot Inc. by less than $100 million over their long-time competitor in the Canadian market.
Notable CSCA Retail 100 rank decreases in 2016 were International Clothiers Inc. (-11), Gordon Brothers Group (-10), and Genuity Capital Markets (-6). Isaac Benitah’s International Clothiers fashion conglomerate had significant store closures in 2016 as a result of numerous bankruptcy filings related to the Les Ailes de la Mode, Designer Depot, Style Exchange, and International Clothiers fashion chains. This follows the 2015 bankruptcy proceedings affecting the B&C Group chains controlled by Fred Benitah that were reported on last year. However, the bankruptcy filings of International Clothiers are not surprising considering the significant competition in Canada’s fashion subsector. The top four fashion retailers in Canada control just 21 per cent of sales in that subsector, indicating a very competitive industry with many different players involved and where business failures will be common.
Canadian-controlled conglomerates accounted for 56.41 per cent of the 2016 CSCA Retail 100 sales, a significant decrease from 59.58 per cent in 2011, largely accounted for by the Lowe’s Companies Inc. acquisition of the formerly Canadian Rona Inc. operations. While other countries, mainly from Europe, did have a presence in Canada’s retail market, their market share in 2016 of 2.13 per cent pales in comparison to that of Canadian and American firms. Debate concerning foreign control of Canadian retail sales continues to revolve around the presence of major U.S. retailers in Canada.