BNN Bloomberg – Toronto Retail Scene Shows Signs of Life. But There’s ‘Shrinkage’
By Michelle Zadikian
The brick and mortar retail scene in Toronto is coming back to life.
Commercial real estate services firm CBRE says there’s been a “huge” increase in retail leasing and sales activity over the past two months as retailers see light at the end of the tunnel and prepare for the post-COVID era.
Data from CBRE show first-quarter sales of retail space in Toronto hit the highest level since 2019, with $181 million spent on storefronts.
“Retail is absolutely picking up again,” said Arlin Markowitz, executive vice-president of the urban retail team at CBRE, in a phone interview.
He added that many businesses are now opting for smaller locations to account for more activity shifting alone online.
“Retailers are definitely shrinking their footprints and figuring out ways to save on rental costs,” he said. “The shrinkage is happening in the stock room, not the floor.”
“Traditionally, a retailer would ‘waste’ 30 to 40 per cent of their square footage on a stock room. Today, we’re seeing that shrink to 20 to 25 per cent and they’re figuring out how to keep their goods in industrial facilities under an hour away from the city where they’re selling,” he added.