1. Rising Costs and Inflationary Pressure
A global trade war will drive up costs for Canadian retailers as tariffs and supply chain disruptions increase the price of imported goods. Essential merchandise categories such as apparel, electronics, and home goods—many of which rely on offshore manufacturing—will see price hikes. Retailers will have to decide whether to absorb these costs or pass them on to consumers, potentially leading to lower sales volumes and a shift in shopping habits toward discount and second-hand markets.
2. Supply Chain Disruptions and Inventory Challenges
With trade restrictions affecting global shipping routes and production hubs, Canadian retailers may struggle to maintain consistent inventory levels. Delays in sourcing materials, production bottlenecks, and increased shipping costs will challenge retailers, especially those reliant on just-in-time inventory models. To mitigate this, businesses may need to seek local alternatives, diversify suppliers, or invest in stockpiling strategies.
3. Shift Toward Domestic Sourcing and Manufacturing
To counteract trade barriers, Canadian retailers may look inward, focusing on domestic manufacturing and North American supply chains. This shift could boost local economies and create jobs but may also come with higher production costs. Retailers will need to balance the appeal of “Made in Canada” products with price sensitivity among consumers. This shift could also drive new marketing strategies emphasizing sustainability and national pride.
4. E-commerce Growth vs. Bricks-and-Mortar Struggles
As global trade disruptions increase costs and reduce selection in physical stores, consumers may turn to e-commerce giants with more flexible logistics networks. Large online platforms, which have the power to source inventory globally and leverage deep discounts, may outcompete traditional retailers. Smaller Canadian retailers may struggle to keep up, pushing some to accelerate digital transformation and invest in online sales channels.
5. Consumer Behavior and Value-Driven Shopping
With economic uncertainty and rising costs, Canadian consumers will become more value-conscious, prioritizing affordability over brand loyalty. Discount retailers, thrift stores, and private-label brands will likely benefit, while premium and non-essential retailers may experience slowdowns. The trade war could also fuel a shift in consumer sentiment toward supporting local businesses, ethical sourcing, and sustainable products.
4o
Top of Form
O
Bottom of Form
