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Luxury retail in Canada is experiencing an architectural boom, with flagship stores and expansions dominating the landscape. Yet, as Randy Harris, founder of Trendex North America, emphasizes, this growth may not reflect a proportional increase in consumer demand. In an engaging conversation, Harris shared his insights on the dynamics shaping Canada\u2019s luxury market and the challenges ahead.<\/p>\n
The recent surge in luxury retail construction has been striking. Yet Harris suggests this may not align with the actual growth of the market. \u201cThe title of my next article could very well be \u2018Luxury Retail Is Booming, But Demand Isn\u2019t,\u2019\u201d he said.<\/p>\n
![\"\"](\"https:\/\/retailinsider.b-cdn.net\/wp-content\/uploads\/2021\/03\/1517617454924.jpeg\")
Luxury brands such as Saint Laurent are expanding aggressively. For example, by mid-2025, Toronto alone will house an estimated 28,000 square feet of Saint Laurent retail space. But Harris cautions against equating this growth with increased consumer spending. \u201cIt\u2019s logical to question whether all these new stores truly expand the market or merely make it easier for existing customers to shop,\u201d he said.<\/p>\n
Loyal Consumers, Limited Growth<\/strong><\/h2>\nHarris highlights that true luxury consumers\u2014those who purchase brands like Chanel or Herm\u00e8s\u2014tend to be extremely brand-loyal. \u201cThese affluent customers aren\u2019t necessarily increasing their purchases because there are more stores,\u201d he said.<\/p>\n
This loyalty contrasts with aspirational buyers, often younger consumers, who save up for occasional luxury purchases. While aspirational buyers contribute to the market, they do not drive the sustained growth needed to justify doubling retail square footage.<\/p>\n
\u201cThe affluent, brand-loyal consumer is not necessarily swayed by convenience,\u201d Harris explained. \u201cThey know their preferred brand, and their shopping habits are unlikely to shift dramatically simply because a flagship store opens nearby.\u201d<\/p>\n![\"\"](\"https:\/\/retailinsider.b-cdn.net\/wp-content\/uploads\/2025\/01\/IMG_9002-1200x675.jpg\")
New luxury wing in the Yorkdale Shopping Centre in Toronto. The mall is adding 65,000 square feet of luxury retail to an already very robust offering. Photo: Craig Patterson <\/figcaption><\/figure>\nTiming Challenges and Deep Pockets<\/strong><\/h2>\nThe decision to expand luxury retail in Canada was likely made years ago, Harris explained, with brands forecasting a brighter economic environment. \u201cYou don\u2019t just flip a switch and open a new store,\u201d he noted. \u201cThese plans were set in motion two or three years ago.\u201d<\/p>\n
Many luxury brands are backed by global conglomerates with significant financial resources. This means they can afford to endure periods of slow growth in Canada. \u201cCanada is such a small part of their portfolio,\u201d Harris said. \u201cThey can ride out a couple of lean years.\u201d<\/p>\n
The Role of Tourism<\/strong><\/h2>\nTourism has historically been a significant driver of luxury retail sales. In Canada, affluent visitors\u2014particularly from China\u2014have played a pivotal role in years past. However, Harris pointed out that the recovery of tourism remains uncertain. \u201cWe haven\u2019t seen the same number of Chinese visitors compared to previous years,\u201d he said.<\/p>\n
The weak Canadian dollar should, in theory, make Canada an attractive shopping destination for international tourists. \u201cA favourable exchange rate is important,\u201d Harris added, \u201cbut it\u2019s not the sole factor. The global flow of tourists, particularly from Asia, has yet to return to pre-pandemic levels.\u201d<\/p>\n
This has significant implications for luxury retailers, many of whom rely on tourist spending to meet their revenue targets. \u201cTourism is a critical input for my analysis of the luxury apparel market,\u201d Harris noted. \u201cWhen visitor numbers are down, it\u2019s a major headwind for the industry.\u201d<\/p>\n![\"\"](\"https:\/\/retailinsider.b-cdn.net\/wp-content\/uploads\/2025\/01\/image-20.png\")
Royalmount in Montreal, prior to its opening in September 2024. Numerous luxury brands have opened their first stores in Quebec, with more to come this year. Image: Carbonleo<\/figcaption><\/figure>\nA Misalignment of Supply and Demand<\/strong><\/h2>\nHarris\u2019s analysis underlines the disconnect between the rapid expansion of luxury retail space and the stagnant growth in demand.\u00a0<\/p>\n
\u201cThe market hasn\u2019t doubled, but the square footage has,\u201d he said. He predicts that brands may face challenges in justifying these expansions, particularly as they continue to rely on affluent but finite consumer bases.<\/p>\n
For instance, the affluent neighborhoods surrounding Toronto\u2019s Yorkdale Shopping Centre offer a prime market for luxury goods. However, as Harris observed, \u201cOpening a flagship store doesn\u2019t necessarily create new customers; it just makes it easier for existing ones to shop.\u201d<\/p>\n
Harris also questioned whether this building boom simplifies shopping or simply overextends retailers. \u201cDoes opening a flagship store really expand your business, or does it just make it easier for customers to access your brand?\u201d he asked.<\/p>\n
Generational and Demographic Trends<\/strong><\/h2>\nThe dichotomy between aspirational and true luxury consumers is a key theme in Harris\u2019s analysis. \u201cYou have younger, aspirational buyers trading up,\u201d he explained. \u201cBut the core luxury consumer is not growing at the same pace as the square footage.\u201d<\/p>\n
Younger buyers are often drawn to accessible luxury items, such as small leather goods or entry-level accessories. \u201cThese purchases are significant,\u201d Harris said, \u201cbut they\u2019re not driving the kind of sustained growth needed for these massive expansions.\u201d<\/p>\n![\"\"](\"https:\/\/retailinsider.b-cdn.net\/wp-content\/uploads\/2024\/07\/IMG_5988-1200x900.jpg\")
Alberni Street at Burrard Street in Downtown Vancouver. Over the past decade, the area has transformed into a significant luxury node. Photo: Lee Rivett. <\/figcaption><\/figure>\nLong-Term Outlook for Luxury Brands<\/strong><\/h2>\nDespite current challenges, Harris is optimistic about the long-term outlook for some luxury brands. \u201cCompanies like Herm\u00e8s and Saint Laurent are playing the long game,\u201d he said. \u201cThey aren\u2019t in any hurry and seem to be doing everything right.\u201d<\/p>\n
Harris noted that brands with measured, thoughtful approaches to growth are more likely to succeed. \u201cThe ones that avoid rushing expansions or overestimating the market will emerge stronger,\u201d he said.<\/p>\n
Brands like Herm\u00e8s have demonstrated a commitment to quality and exclusivity, which helps maintain their appeal even during market slowdowns. \u201cHerm\u00e8s, in particular, has mastered the art of scarcity,\u201d Harris said. \u201cTheir strategy ensures long-term desirability and brand equity.\u201d<\/p>\n
The Post-Pandemic Landscape<\/strong><\/h2>\nThe effects of the COVID-19 pandemic continue to shape the luxury retail landscape. Harris noted that some expansions planned during the pandemic were based on overly optimistic forecasts. \u201cBrands assumed the retail environment would bounce back faster than it has,\u201d he said.<\/p>\n
Additionally, the shift to e-commerce during the pandemic has left a lasting impact. While luxury consumers still value in-person shopping experiences, the convenience of online shopping cannot be ignored. \u201cRetailers need to balance their brick-and-mortar investments with robust online offerings,\u201d Harris advised.<\/p>\n![\"\"](\"https:\/\/retailinsider.b-cdn.net\/wp-content\/uploads\/2024\/11\/image-67.png\")
Oakridge Park in Vancouver, opening summer 2025. Image: QuadReal<\/figcaption><\/figure>\nGlobal Context for Luxury Retail<\/strong><\/h2>\nHarris also highlighted how Canada\u2019s luxury retail trends align with global patterns. \u201cThe expansion of flagship stores is not unique to Canada,\u201d he said. \u201cIt\u2019s part of a broader strategy by luxury brands to solidify their presence in key markets.\u201d<\/p>\n
However, he cautioned that Canada\u2019s smaller population and limited tourist appeal make it distinct from other luxury hubs like Paris or New York. \u201cThe scale here is different,\u201d Harris explained. \u201cBrands need to adjust their strategies accordingly.\u201d<\/p>\n
The future of luxury retail in Canada will depend on a delicate balance of market forces, including consumer behaviour, tourism, and global economic trends. Harris underscored the importance of aligning growth strategies with actual market demand. \u201cIt\u2019s about more than just buildings; it\u2019s about understanding where the market is headed,\u201d he said.<\/p>\n
More from Retail Insider: <\/h2>\n<\/div>\n
Timing Challenges and Deep Pockets<\/strong><\/h2>\nThe decision to expand luxury retail in Canada was likely made years ago, Harris explained, with brands forecasting a brighter economic environment. \u201cYou don\u2019t just flip a switch and open a new store,\u201d he noted. \u201cThese plans were set in motion two or three years ago.\u201d<\/p>\n
Many luxury brands are backed by global conglomerates with significant financial resources. This means they can afford to endure periods of slow growth in Canada. \u201cCanada is such a small part of their portfolio,\u201d Harris said. \u201cThey can ride out a couple of lean years.\u201d<\/p>\n
The Role of Tourism<\/strong><\/h2>\nTourism has historically been a significant driver of luxury retail sales. In Canada, affluent visitors\u2014particularly from China\u2014have played a pivotal role in years past. However, Harris pointed out that the recovery of tourism remains uncertain. \u201cWe haven\u2019t seen the same number of Chinese visitors compared to previous years,\u201d he said.<\/p>\n
The weak Canadian dollar should, in theory, make Canada an attractive shopping destination for international tourists. \u201cA favourable exchange rate is important,\u201d Harris added, \u201cbut it\u2019s not the sole factor. The global flow of tourists, particularly from Asia, has yet to return to pre-pandemic levels.\u201d<\/p>\n
This has significant implications for luxury retailers, many of whom rely on tourist spending to meet their revenue targets. \u201cTourism is a critical input for my analysis of the luxury apparel market,\u201d Harris noted. \u201cWhen visitor numbers are down, it\u2019s a major headwind for the industry.\u201d<\/p>\nRoyalmount in Montreal, prior to its opening in September 2024. Numerous luxury brands have opened their first stores in Quebec, with more to come this year. Image: Carbonleo<\/figcaption><\/figure>\nA Misalignment of Supply and Demand<\/strong><\/h2>\nHarris\u2019s analysis underlines the disconnect between the rapid expansion of luxury retail space and the stagnant growth in demand.\u00a0<\/p>\n
\u201cThe market hasn\u2019t doubled, but the square footage has,\u201d he said. He predicts that brands may face challenges in justifying these expansions, particularly as they continue to rely on affluent but finite consumer bases.<\/p>\n
For instance, the affluent neighborhoods surrounding Toronto\u2019s Yorkdale Shopping Centre offer a prime market for luxury goods. However, as Harris observed, \u201cOpening a flagship store doesn\u2019t necessarily create new customers; it just makes it easier for existing ones to shop.\u201d<\/p>\n
Harris also questioned whether this building boom simplifies shopping or simply overextends retailers. \u201cDoes opening a flagship store really expand your business, or does it just make it easier for customers to access your brand?\u201d he asked.<\/p>\n
Generational and Demographic Trends<\/strong><\/h2>\nThe dichotomy between aspirational and true luxury consumers is a key theme in Harris\u2019s analysis. \u201cYou have younger, aspirational buyers trading up,\u201d he explained. \u201cBut the core luxury consumer is not growing at the same pace as the square footage.\u201d<\/p>\n
Younger buyers are often drawn to accessible luxury items, such as small leather goods or entry-level accessories. \u201cThese purchases are significant,\u201d Harris said, \u201cbut they\u2019re not driving the kind of sustained growth needed for these massive expansions.\u201d<\/p>\nAlberni Street at Burrard Street in Downtown Vancouver. Over the past decade, the area has transformed into a significant luxury node. Photo: Lee Rivett. <\/figcaption><\/figure>\nLong-Term Outlook for Luxury Brands<\/strong><\/h2>\nDespite current challenges, Harris is optimistic about the long-term outlook for some luxury brands. \u201cCompanies like Herm\u00e8s and Saint Laurent are playing the long game,\u201d he said. \u201cThey aren\u2019t in any hurry and seem to be doing everything right.\u201d<\/p>\n
Harris noted that brands with measured, thoughtful approaches to growth are more likely to succeed. \u201cThe ones that avoid rushing expansions or overestimating the market will emerge stronger,\u201d he said.<\/p>\n
Brands like Herm\u00e8s have demonstrated a commitment to quality and exclusivity, which helps maintain their appeal even during market slowdowns. \u201cHerm\u00e8s, in particular, has mastered the art of scarcity,\u201d Harris said. \u201cTheir strategy ensures long-term desirability and brand equity.\u201d<\/p>\n
The Post-Pandemic Landscape<\/strong><\/h2>\nThe effects of the COVID-19 pandemic continue to shape the luxury retail landscape. Harris noted that some expansions planned during the pandemic were based on overly optimistic forecasts. \u201cBrands assumed the retail environment would bounce back faster than it has,\u201d he said.<\/p>\n
Additionally, the shift to e-commerce during the pandemic has left a lasting impact. While luxury consumers still value in-person shopping experiences, the convenience of online shopping cannot be ignored. \u201cRetailers need to balance their brick-and-mortar investments with robust online offerings,\u201d Harris advised.<\/p>\nOakridge Park in Vancouver, opening summer 2025. Image: QuadReal<\/figcaption><\/figure>\nGlobal Context for Luxury Retail<\/strong><\/h2>\nHarris also highlighted how Canada\u2019s luxury retail trends align with global patterns. \u201cThe expansion of flagship stores is not unique to Canada,\u201d he said. \u201cIt\u2019s part of a broader strategy by luxury brands to solidify their presence in key markets.\u201d<\/p>\n
However, he cautioned that Canada\u2019s smaller population and limited tourist appeal make it distinct from other luxury hubs like Paris or New York. \u201cThe scale here is different,\u201d Harris explained. \u201cBrands need to adjust their strategies accordingly.\u201d<\/p>\n
The future of luxury retail in Canada will depend on a delicate balance of market forces, including consumer behaviour, tourism, and global economic trends. Harris underscored the importance of aligning growth strategies with actual market demand. \u201cIt\u2019s about more than just buildings; it\u2019s about understanding where the market is headed,\u201d he said.<\/p>\n
More from Retail Insider: <\/h2>\n<\/div>\n
Tourism has historically been a significant driver of luxury retail sales. In Canada, affluent visitors\u2014particularly from China\u2014have played a pivotal role in years past. However, Harris pointed out that the recovery of tourism remains uncertain. \u201cWe haven\u2019t seen the same number of Chinese visitors compared to previous years,\u201d he said.<\/p>\n
The weak Canadian dollar should, in theory, make Canada an attractive shopping destination for international tourists. \u201cA favourable exchange rate is important,\u201d Harris added, \u201cbut it\u2019s not the sole factor. The global flow of tourists, particularly from Asia, has yet to return to pre-pandemic levels.\u201d<\/p>\n
This has significant implications for luxury retailers, many of whom rely on tourist spending to meet their revenue targets. \u201cTourism is a critical input for my analysis of the luxury apparel market,\u201d Harris noted. \u201cWhen visitor numbers are down, it\u2019s a major headwind for the industry.\u201d<\/p>\n Harris\u2019s analysis underlines the disconnect between the rapid expansion of luxury retail space and the stagnant growth in demand.\u00a0<\/p>\n \u201cThe market hasn\u2019t doubled, but the square footage has,\u201d he said. He predicts that brands may face challenges in justifying these expansions, particularly as they continue to rely on affluent but finite consumer bases.<\/p>\n For instance, the affluent neighborhoods surrounding Toronto\u2019s Yorkdale Shopping Centre offer a prime market for luxury goods. However, as Harris observed, \u201cOpening a flagship store doesn\u2019t necessarily create new customers; it just makes it easier for existing ones to shop.\u201d<\/p>\n Harris also questioned whether this building boom simplifies shopping or simply overextends retailers. \u201cDoes opening a flagship store really expand your business, or does it just make it easier for customers to access your brand?\u201d he asked.<\/p>\n The dichotomy between aspirational and true luxury consumers is a key theme in Harris\u2019s analysis. \u201cYou have younger, aspirational buyers trading up,\u201d he explained. \u201cBut the core luxury consumer is not growing at the same pace as the square footage.\u201d<\/p>\n Younger buyers are often drawn to accessible luxury items, such as small leather goods or entry-level accessories. \u201cThese purchases are significant,\u201d Harris said, \u201cbut they\u2019re not driving the kind of sustained growth needed for these massive expansions.\u201d<\/p>\n Despite current challenges, Harris is optimistic about the long-term outlook for some luxury brands. \u201cCompanies like Herm\u00e8s and Saint Laurent are playing the long game,\u201d he said. \u201cThey aren\u2019t in any hurry and seem to be doing everything right.\u201d<\/p>\n Harris noted that brands with measured, thoughtful approaches to growth are more likely to succeed. \u201cThe ones that avoid rushing expansions or overestimating the market will emerge stronger,\u201d he said.<\/p>\n Brands like Herm\u00e8s have demonstrated a commitment to quality and exclusivity, which helps maintain their appeal even during market slowdowns. \u201cHerm\u00e8s, in particular, has mastered the art of scarcity,\u201d Harris said. \u201cTheir strategy ensures long-term desirability and brand equity.\u201d<\/p>\n The effects of the COVID-19 pandemic continue to shape the luxury retail landscape. Harris noted that some expansions planned during the pandemic were based on overly optimistic forecasts. \u201cBrands assumed the retail environment would bounce back faster than it has,\u201d he said.<\/p>\n Additionally, the shift to e-commerce during the pandemic has left a lasting impact. While luxury consumers still value in-person shopping experiences, the convenience of online shopping cannot be ignored. \u201cRetailers need to balance their brick-and-mortar investments with robust online offerings,\u201d Harris advised.<\/p>\n Harris also highlighted how Canada\u2019s luxury retail trends align with global patterns. \u201cThe expansion of flagship stores is not unique to Canada,\u201d he said. \u201cIt\u2019s part of a broader strategy by luxury brands to solidify their presence in key markets.\u201d<\/p>\n However, he cautioned that Canada\u2019s smaller population and limited tourist appeal make it distinct from other luxury hubs like Paris or New York. \u201cThe scale here is different,\u201d Harris explained. \u201cBrands need to adjust their strategies accordingly.\u201d<\/p>\n The future of luxury retail in Canada will depend on a delicate balance of market forces, including consumer behaviour, tourism, and global economic trends. Harris underscored the importance of aligning growth strategies with actual market demand. \u201cIt\u2019s about more than just buildings; it\u2019s about understanding where the market is headed,\u201d he said.<\/p>\nA Misalignment of Supply and Demand<\/strong><\/h2>\n
Generational and Demographic Trends<\/strong><\/h2>\n
Long-Term Outlook for Luxury Brands<\/strong><\/h2>\n
The Post-Pandemic Landscape<\/strong><\/h2>\n
Global Context for Luxury Retail<\/strong><\/h2>\n
More from Retail Insider: <\/h2>\n<\/div>\n