Richard Crenian Blogs
January 19, 2009
“Retail in Canada-09”
We are truly blessed to be in Canada. The attitude that bigger is better in the USA is not always true. Look at what has happened in the States.
So much competition for the products to sell and when you don’t have a good month and good cash flow coming in you are toast! Just ask the airlines. They are only a few DAYS away from going bye bye!
We have seen Circuit City and Linens and Things go, in the US, and now who else?
We did see Winn Dixie the grocery store go bye as well earlier.
Why haven’t we seen any majors in Canada go the way of the Dinosaur.
Here is why retailers I think, in Canada will survive better than the USA.
Canada has about 14 square feet of retail space per capita, while in the U.S. that is approximately 30 square feet per capita.
That means there is twice as much retail space in the USA than there is in Canada.
That also means compared to the US, Canadian sales are twice as high per square foot than the US. If that is the case, it should be obvious that the Canadian retailers are more profitable in their space that they are in, and should be in a better spot to remain liquid when there is a full sales slowdown.
Apparently that according to some retail sales in Canada are the best statistic to monitor what is happening in Canada, since there has been only one year that there has been a decline in sales on an aggregate nominal basis, ……and that year was 1934!
So do I like retail space in Canada-yes! Do I see retail space in the US becoming a problem-yes. Canadian rents are still low and therefore there may be a potential upside to the landlords as rents renew.
Rents in Alberta still have a way to go up.
We have been focused on buying non-box centres because we believe that if the box centres have failures then it will take a lot of space away from the centres. Believing in Canadian retailers is our only option.
Call Howard, and ask him how the slush is in Calgary? 403 630 4544.