Big box stores big drain on Canada's downtowns

Date published: 2006-05-16 8:44:46 AM

For this year’s holiday shopping, chances are you’re driving out to one of the big box stores in the suburbs—even if you live in one of Canada’s major downtowns.

“The downtowns of Canada are in financial trouble,” warns Ken Jones, Chair in the Management of Technological Change at Ryerson University.

Jones has been studying Canadian commerce for ten years. His research, funded by SSHRC, NSERC and the Eaton Foundation, reveals that retailers in our major downtown areas are losing a lot of business to the suburban big box stores. These changes could foreshadow the kind of gutting of city centres that took place in major American cities in the 1960s and 1970s.

The numbers are dramatic: between 1989 and 1996, retail sales in Canada’s top urban downtown areas dropped by an average of 28 per cent. In Hamilton, Edmonton and Winnipeg, sales dropped between 38 and 40 per cent. Even downtown Toronto, with its huge tourist industry and steady immigration, lost 25 per cent. Only downtown Calgary showed a modest growth of 13 per cent.

Recent data suggests that this trend will continue as more big box stores open in Canadian suburbs. “Big boxes such as Chapters, Costco and Home Depot are now anchoring retail hot spots,” says Jones. “Three years ago there were no areas dominated by big boxes in Canada’s top 20 retail hubs; now there are three. People’s shopping habits are clearly changing.”

Among the factors contributing to these changes, Jones cites steadily growing suburbs, high tax rates in the city centres and shrinking investment in infrastructure that makes downtowns difficult to access.

“The rapid changes in our retail landscape should concern Canadians,” declares Jones. “We need to foster our downtown areas year-round, if we want them to remain our cities’ commercial and cultural centres. I don’t think you can have a healthy downtown without a healthy retail system.”

Kenneth Jones has received a number of SSHRC grants including the joint SSHRC/NSERC Chair in the Management of Technological change in retailing.