Discretionary retail drives growth
Key trends
Positive Discretionary Momentum: Discretionary spending accelerated in the first half of 2025, defying subdued consumer confidence. Supported by the “Buy Canadian” movement and resilient back-to-school shopping, this trend suggests a positive outlook for the upcoming holiday season.
Shrinking Development Pipeline: The pipeline for major retail developments is shrinking, with new completion levels at a historic low. Vancouver and Calgary are the most active markets for new construction.
Historically Low Availability: Canadian markets, especially Vancouver and Toronto, have some of the lowest availability rates in North America compared with their U.S. peers. Despite softening net absorption, these tight conditions ensure that the market remains favourable for landlords.
Experience-Driven Store Expansion: Shoppers continue to prioritize experiences, with dining, entertainment, and fitness & wellness services comprising the bulk of new-store announcements in the first half of 2025.