Please summarize "Inflation and elevated interest rates constrained wallets in 2023 and led to a gradual 
consumer pullback in the latter half of the year. This rebalancing period is expected 
to continue in 2024 with Oxford Economics forecasting retail sales to decline yearover-year by -0.6%. Ultimately this will put capturing and maintaining consumer 
attention into sharper focus for brands in the year ahead with 64% of respondents in 
Salesforce’s State of Commerce survey indicated that meeting customer 
expectations is harder than ever.
Consumer behaviours started to shift amidst the peak of inflation in 2023 as 
shoppers became more critical of their discretionary spending and household 
budgets. Value in particular has had a boom with sales growth at brands that offer 
savings. Continuing from 2023, consumers will try to save money on essential items 
in 2024 by trading down to value channels and products, especially for grocery items 
where inflation has been most acutely felt. This is both to reduce spending and allow 
consumers the ability to trade up or spend more on less essential items, including 
luxury goods or other micro indulgencies. 
All that said, 2024 promises to challenge retailers. Expect retailers to lean into 
discounts or other targeted promotions to capture the selective spending and move 
product. Expansion and innovation will be greatest among those facing headwinds or 
that are carving a niche for themselves within the Canadian marketplace. Elevated interest rates are having a material impact on business 
operations. Coupled with a cost-of-living crisis and pullback in 
consumer spending, business insolvency filings started to creep up 
across the country in 2023, increasing over 40% from the prior year. 
The Federal government deadline to pay back pandemic loans 
happened in early 2024, the impact of which will be most acutely felt 
among small businesses, with many speculating we will see more 
churn in the industry in the year ahead. 
Consolidation, rollup, and acquisition will likely be seen among 
established brands propelling these institutions to grow and reach new 
highs in 2024. We started to see some of these moves take shape in 
2023 including Putman Investments taking on a portion of the former 
Bed Bath & Beyond portfolio; as well as Unity Brands acquiring Kit + 
Ace and Mastermind Toys. In each of these cases, the originating 
brand needed some form of repositioning, either having been stagnant 
or by growing too quickly.
From a real estate perspective, this churn can be viewed as a good 
thing as it brings the potential to open opportunities in markets where 
vacancy has been limited. Looking at REIT-owned property 
performance, retail vacancy trended down over 2023 to 4.0% with all 
but regional shopping centres showing a marked improvement. Good 
real estate has and will continue to be leased quickly, resulting in 
limited vacancy amongst the most in-demand formats, namely 
grocery-anchored centres. Because of this, tight market conditions are 
expected to persist, especially when paired with a softening supply 
pipeline, a byproduct of higher construction costs.Part of the competitive edge that companies will be seeking in the year ahead involves 
implementing technologies such as Artificial Intelligence (AI), especially as it aids in improving the 
customer experience though personalized recommendations and product discovery. AI 
technologies and solutions will drive innovation, improve the shopper journey, deepen loyalty, and 
elevate the overall brand.
As with any type of change however comes a learning curve before being widely adopted. SOTI’s 
Techspectations: Consumer Demand for Digital Transformation in Retail report found that there 
are still some pain points to both new and existing technologies being implemented. Namely, 78% 
of Canadians expressed security concerns with personal data related to AI. Retailers need to 
balance convenience and security while building trust in this sphere. 
The technology learning curve can also extend to the physical store as we’ve seen a rapid 
adoption self-checkout stations or sales professionals carrying around tablets that check store 
inventory. According to SOTI, 43% of customers indicated that these technologies can enhance 
shopping convenience and speed; however technology can also complicate the shopping 
experience with 28% of respondents finding making in-store purchases more confusing. 
It will be important in the year ahead that the technologies being implemented in-store are 
thoughtful and effective to the customer experience. CBRE’s Global Live-Work-Shop Report found 
that Canadians prefer to shop in-person across all categories, a fact that should not be forgotten. 
Consumers are eager to engage in more lively, personalized shopping experiences that cannot be 
offered online"