Insider Only Ottawa, Retail

Mixed bag of results being seen at local malls during this holiday shopping season

Sales and foot traffic steady but high food prices and new work patterns are dampeners

December 15, 2022

Early indications are that the 2022 holiday shopping season will be better than last year, but customers still may not open their wallets as readily as they did pre-pandemic.

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Ottawa’s big malls don’t expect to set any sales records this holiday season but hope that Santa may still surprise them. Early indications are that the 2022 holiday shopping season will be better than last year, but customers still may not open their wallets as readily as they did pre-pandemic. Higher prices, talk of recession and changing work patterns have all complicated the holiday outlook. One bright spot is that malls continue to attract in-person shoppers following two years of restrictions and uncertainties. Numbers from the Avison Young Vitality Index suggest retail foot traffic in Ottawa for Black Friday was stable, up six per cent over the previous year. That compares to an eight per cent increase nationally. Edmonton saw the greatest increase at 22 per cent, while Montreal saw the lowest at three per cent. The same numbers show an increase in traditional mall traffic relative to big box stores. In Ottawa, shopping mall foot traffic was up four per cent over 2021, while big box traffic was down eight per cent. “This demonstrates that people are looking for in-person experiences. Malls offer holiday decorations and activities that draw people in, such as dining experiences, as compared to many big-box locations,” said Andrea Zviedris, Avison Young media relations director. A survey of major malls by OBJ suggests a shifting retail landscape in which sales are up from 2021 and holding steady. However, high food prices and changing work patterns are impacting foot traffic. “All in all, whether it's sales or traffic, we're pretty happy with what's going on right now,” said Denis Pelletier. Pelletier is general manager at Bayshore Shopping Centre, where sales are up three per cent over last year but are still below 2019 levels, a target Pelletier hopes to hit this season. He suspects remote work is giving the suburban mall an edge. “If you're working from home and you're not working downtown in an office and you have a choice to either go to Rideau Centre or Bayshore, for example, and there's a particular store that we have both in common, maybe you'll come to Bayshore,” Pelletier said. He notes that higher prices in the food court and outside business via third-party delivery services may be dampening sales. There are also mixed results being seen at St Laurent Shopping Centre, according to general manager Amy Rozario. While foot traffic remains well below 2019 levels thanks to low LRT ridership and shifting work patterns, sales are fairly stable, Rozario said, down three per cent from 2019. At the Rideau Centre, general manager Brian O’Hoski predicts that very strong sales at some retailers may nudge the mall over its 2019 sales numbers, which was a banner year for Ottawa’s biggest mall. “I think we're going to have a nice strong finish for the holidays and I think Boxing Week is going to be good, too. Christmas falls on the Sunday, so everyone's going to pretty much have that full week and I bet that's going to translate to some big sales,” O’Hoski said. He says that foot traffic at the Rideau Centre was very high for Black Friday, but the mall continues to miss the daily commuter traffic of office workers to the downtown. He notes the strong sales are not equal across the board. “Some retailers are really hitting out the park, others are still finding their footing in the new world. But we're happy with where we are,” O’Hoski said. Local retail analyst Barry Nabatian expects holiday optimism to buoy spending in Ottawa this season. “(Shoppers) still have lots of money and it's the holiday season, people are in a good mood. They are going to continue to buy and even though they know that the recession is likely to come, they try to not pay attention to it until when it comes,” said Nabatian, director of market research with Shore Tanner and Associates. Based on Black Friday numbers south of the border and combined with a stable jobs situation in the Ottawa area, he predicts holiday shoppers will spend six to eight per cent more than they did in 2021, an increase roughly in line with inflation. In terms of malls, Nabatian expects sales numbers to vary based on the size of the mall and the type of anchor clients. He expects neighbourhood malls anchored by a supermarket, pharmacy, liquor store or restaurant to do best, followed by larger, regional malls like Bayshore, Rideau Centre and St Laurent.