As 2026 unfolds, Canadian retail finds itself at a strategic crossroads, navigating the dual forces of digital transformation and changing consumer demographics. Premium brands are recalibrating physical footprints while embracing immersive store designs and experiential formats.
Amid economic shifts and employment changes, retailers must remain agile, leveraging technology and aligning with new consumer priorities. This overview highlights key trends, retailer moves, and operational insights reshaping Canada’s retail sector.
Flagship Investments and Store Strategy Shifts
Retailers are realigning their physical presence with new market realities.
For example, Moose Knuckles downsized to a smaller, high-performance store in Toronto Eaton Centre while maintaining outlet strategies internationally, blending urban prestige with outlet accessibility.
Tiffany & Co.’s expansion in Montreal’s Royalmount with a contemporary flagship reinforces luxury retail’s focus on design-driven experiences in city centers.
Meanwhile, Sports Experts is growing its footprint by over 50% at Place Ste-Foy, repurposing a former Saks OFF 5TH location to offer enhanced merchandise and experiential retailing.
Economic and Labour Market Impacts
The labour market presents a complex picture: unemployment rose to 6.8% in December 2025 but wage growth of 3.4% persisted, reflecting sectoral shifts including healthcare employment gains and declines in youth job participation.
This K-shaped economic recovery influences retail spending patterns and tenant strategies, pressing landlords and retailers to forecast consumption behaviors carefully.
Artificial Intelligence Transforming Operations
AI’s integration into retail operations is accelerating, with 89% of retail executives predicting significant job role changes due to AI in 2026. Over 70% have implemented AI for customer experience enhancement and cybersecurity.
However, successful deployment hinges on overcoming IT infrastructure complexities, which is a vital concern for retail operations and commercial real estate making tech-forward investments.
Consumer Behavior Trends and Sustainability
Gen Z’s distinct consumption patterns, including opting out of traditional milestones, significantly affect retail demand.
Sustainability and social impact initiatives are increasingly central, exemplified by campaigns such as CNIB and THE TEN SPOT’s Braille Nails fundraiser aligning retail growth with community engagement. Such initiatives also underscore evolving consumer expectations around corporate responsibility.
Leadership and Market Continuity
Stability in retail leadership points to a phase of strategic execution and cautious market repositioning. New appointments emphasize sustainability and urban development expertise, vital for maintaining competitive advantages in luxury districts like Bloor-Yorkville. Meanwhile, quick-service restaurant groups showcase how disciplined franchising supports expansion despite economic headwinds.
Canadian retail in early 2026 reflects a landscape balancing tradition and innovation. Optimizing physical stores, investing in AI, and adapting to shifting consumer values, especially among younger generations, are keys to success.
For commercial real estate and retail leaders, strategic alignment with technological advancements and demographic shifts will be crucial to capitalize on emerging opportunities.
More about consumer shifts:
Dan Craft
Ashton York
Staff Report
