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Canadian Retail Begins 2026 on a More Stable Footing

January 30, 2026 4 Minute Read

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The Canadian retail landscape is beginning 2026 on a more stable footing.

While many cities have rebounded from recent volatility, CBRE’s H2 2025 Retail Rent Survey notes that resilience has not been universal in the face of continued economic uncertainty. Nevertheless, headwinds improved as the year progressed, with stabilization becoming more evident across the country heading into 2026.

“Demand from retail brands remains healthy, with leasing activity spread across most categories,” says CBRE Senior Vice President Alex Edmison. “When you drill into the numbers, retail performance continues to be highly situational. Local demographics, tenant mix and economic drivers can make or break retailers. Strategic tenant relocations continue in response to these dynamics, particularly for flagships in high density areas.”

When you drill into the numbers, retail performance is highly situational. Local demographics, tenant mix and economic drivers can make or break retailers. - Alex Edmison

Here are some key takeaways from the Retail Rent Survey:

  • Retail supply remains constrained across Canada, keeping vacancy tight amid strong leasing. Elevated development costs have limited new construction in recent years. Strong fundamentals are starting to unlock construction in select markets where demand is well established and pre-leasing has been secured.
  • Rental rates continue to ramp up, increasing in 37 of the total 120 format types or key urban areas captured in the survey.
  • Grocery-anchored suburban centres are top performers. Select urban retail nodes have also experienced a substantial rebound where return-to-office mandates have taken effect, supporting improved daytime foot traffic.
  • Demand remains strong for fitness and wellness services, particularly in Ontario and Western Canada. In Calgary, physician recruitment initiatives have driven a notable increase in demand for medical clinics, while Edmonton has seen success backfilling large format vacancies.

Here are trends to watch for in 2026:

  • Strong interest in former HBC spaces - Some locations have been leased by Canadian Tire, Sport Chek, Mark’s, and TJX. Entertainment uses are also being explored for these vacant boxes, including Round 1, Happy Kingdom, and Splitsville Bowl. Some landlords are looking to extend the mall corridor into these spaces with smaller units, while some have plans to demolish HBC boxes altogether. Large format brands like Toys R Us, Linen Chest and JYSK are closing underperforming locations, creating new availabilities in a traditionally tight market.
  • Luxury & Atheleisure - First to market luxury brands continue to push into key retail districts while the major luxury houses have become ultra selective and slow to sign new deals after a mixed performance in 2025. Strong momentum has been visible across the athleisure sector, with brands such as Arc’teryx, Lululemon, ON, Vuori, Hoka and Reigning Champ signing new leases and competing for space.
  • Value - On the other end of the spend spectrum, value-oriented brands have been doing well. Retailers in this category are absorbing growing demand from cost-conscious households, with consumers expected to further reduce their spending in 2026. Brands like Winners/Marshalls/Homesense, Structube, IKEA, Uniqlo and Crunch Fitness have expanded within this category.

Some notable retail trends to watch for in markets across Canada:

  • Vancouver - The announcement of Aritzia's new 40,000 sq. ft. flagship in a portion of Nordstrom's former space at Pacific Centre signals renewed confidence in Vancouver's core. This is supported by the opening of several new restaurants downtown as foot traffic continues to improve. Retail vacancies and rental rates are expected to remain stable or increase, as the delivery of new retail product is closely tied to mixed use development, which has slowed to a crawl.
  • Calgary - The College of Physicians and Surgeons of Alberta's sponsorship initiative fueled demand for medical clinic space. A streamlined process for recruiting international medical graduates has resulted in over 600 physician hires, amplifying demand in this category, which has been on hiatus since 2020.
  • Winnipeg - Costco opened its newest Winnipeg location, a 166,894 sq. ft. warehouse in Headingley's Westport Development. This new mixed-use development promises to bring retail, office, and warehousing to the west end of the Greater Winnipeg Area. Olexa Developments has broken ground on their new mixed-use development located in the St. Boniface neighbourhood.
  • Toronto - Yorkdale Shopping Centre and Bloor Street West continue to welcome first to market entrants. The latest is Gentle Monster, a Korean eyewear label which opened in December. On Bloor, Italian menswear boutique Luca Faloni has gotten much fanfare, meanwhile anticipation is growing for Tiffany & Co.’s Canadian flagship at the iconic corner of Bay and Bloor, opening spring 2026.
  • Montreal - Brand names on Sainte-Catherine Street West are relocating into new flagship stores. Demand from national and international retailers is on the rise. The Sainte-Catherine revitalization is well underway, with the latest phase shifting west in September. This initiative is replacing aging infrastructure and enhancing pedestrian spaces.

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