Canadian Retailers to Become More Profitable In 2017
Multiple factors are working together to help Canadian retailers become more profitable in 2017, which could aid commercial real estate investors in becoming even more profitable too.
What’s happening now? How might it help Canadian retailers become more profitable?
Infill building activity and allowances for high density development are going to increase potential traffic for local shopping plazas. New residents have immediate needs when moving into a new place and for those retail shops that can have a tremendous difference in sales per square foot, resulting in higher profit margins.
Although Canada may be lagging on the adoption of technology when compared to other places, however in-store automation is spreading. There are big global concerns that some 80% of jobs are to be replaced by robots, devices, and artificial intelligence in just the next few years.
We are already seeing that at local shops and restaurants, as the technology needed to virtually replace every in-store function done by humans already exists. This may require some upfront investment. Yet, it also means the potential to eliminate waste, reduce labor costs, minimize liability, improve service, optimize efficiency, and increase net income and profit.
Online sales don’t necessarily have to result in a loss for brick and mortar retailers. Rather, it is a way to augment and increase same store sales revenues and profitability, as shoppers can visit a retail location and then complete a purchase from their phones or they can order online and pick up from the store.
More Efficient Buildings
As commercial properties and individual retail locations are redesigned and remodeled to be more efficient, retailers have seen a boost in the level of worker productivity and the wellbeing of their guests. When coupled with reduced maintenance and operational costs, this trend will continue to contribute more to the bottom line of both retailers and landlords.
It’s an exciting time to be going into business or growing an existing retail shop in Canada. By capitalizing on some of the trends mentioned above, commercial real estate investors could benefit greatly as retailers continue to grow consistently with increasing profitability and fewer vacancies.