Apple Store Outperforms Other Canadian Retailers
Walmart's Popularity Could Be a Challenge for Target
TORONTO, ONTARIO -- (Marketwire) -- 06/09/11 -- According to Canadian consumers surveyed in the 2011 Major Market Retail Report (MMRR) study, conducted for the 15th year by KubasPrimedia, The Apple Store is Canada's highest rated retailer. With an overall score of 63 out of 100, The Apple store ranked first in Customer Service, first in Merchandise Quality, and second in Store Layout and Decor, but tied for last place in Value for Money.
The other retailers rounding out the top five are Lowe's, La Maison Simons, Jean Coutu, and Holt Renfrew. Walmart, Canadian Tire, and Shoppers Drug Mart are the three most-shopped retailers in Canada.
"The Canadian retail landscape is about to undergo a significant change with the arrival of Target in 2013," said Ed Strapagiel, Executive Vice-President of KubasPrimedia. "While MMRR found significant consumer interest in shopping at Target, the company faces two big questions as they prepare to enter the Canadian market. Can they challenge Walmart's popularity - Walmart is the most shopped retailer in 15 of 33 product categories and the second most shopped in eight others. Or, conversely, are Walmart shoppers anxious for a new retail option?"
MMRR, based on surveys with over 1,500 Canadians in Vancouver, Edmonton, Calgary, Toronto, Ottawa, and Montreal, examines consumer behaviour in 33 product categories at 147 retailers. It examines a range of competitive retail metrics, such as market coverage, shopping levels, drawing power, loyalty, and consumer performance ratings.
"The retail spending power of consumers in this survey is impressive. We estimate the top six Canadian markets will generate a projected $223 billion in retail sales in 2011, or about 49% of the national total of $460 billion," said Strapagiel. "Despite these big numbers, retailers have to pay close attention to their competitive position in the marketplace, because retail is growing only modestly and waves of new competitors are moving in to Canada from the U.S."
Rogers Bests Bell
The Electronics Communications category, new in MMRR 2011, was dominated by Rogers Wireless. Nearly one in four Canadian consumers shopped at Rogers Wireless last year, while Best Buy came in second and Bell Mobility ranked fourth.
In Home Decor, another new MMRR product category, Walmart was the most shopped at 39% compared to Ikea at 37%; however, Ikea was the "most preferred" retailer in the category at 27% to Walmart's 22%.
Loyalty Programs Making Significant Impact
Loyalty programs continue to be highly used by Canadians. Nearly 80% of survey respondents stated that they are currently enrolled in Air Miles, making it the most popular loyalty program in Canada. HBC Rewards and Canadian Tire Money are number two and three respectively. Surprisingly, 8% of Canadians are already members of Target's "REDcard" loyalty program.
In terms of recent usage, over 41% of respondents said they had used Air Miles within the past month, Shoppers Drug Mart's Optimum program is second with 24%, and Costco's membership is third at 22%.
Consumer Confidence Improves but Spending Intentions Remain Flat
MMRR 2011 found that consumers are more optimistic about the economy, with 48% of stating the economy is getting better and only 28% saying things are getting worse This is a stark contrast to the 2008 findings, where 44% of respondents felt the economy was getting worse.
Calgary is the most optimistic market in Canada with 60% of consumers stating the economy is getting better and just 17% saying it is getting worse.
Montreal is the most pessimistic market with 35% of survey respondents saying the economy is improving and 40% saying the economy is getting worse.
"Despite the increased economic optimism, we do not expect to see significant increases in consumer spending this year," said Strapagiel. "Nearly 70% of consumers told us they expect their retail spending to be the same or less than in 2010."
Popularity of On-line Shopping and Information Grows
Almost 70% of survey respondents made an online purchase in the last 12 months. MMRR results show that Canadians are still shopping at retail stores for books, magazines, music and videos with 56% of Canadian consumers going to physical shops to make purchases in this category, down from 66% in 2008.
"Consumers still prefer the 'bricks and mortar' option for purchasing books, magazines, music and videos," said Strapagiel. "But it may be only a matter of time before the balance shifts to online in these categories. While Chapters and Walmart lead the way among preferred physical retailers, online has jumped to the number three preferred supplier in this category, up from number six in our previous report."
For the first time in the study's history, online ranked ahead of flyers as the preferred source of product and shopping information, with 73% of respondents rating the Internet as "good" or "excellent" compared to 71% who favoured flyers. Consumers however still showed a strong loyalty to printed flyers with 48% saying they use them often vs. the 22% who use e-flyers often.
Consumers are overwhelmingly opting-in to online advertising - 82% of respondents receive at least one piece of direct e-mail advertising, a dramatic increase over the 62% in 2008. On average, Canadian consumers receive opt-in advertising from 4.5 retail sources.
About Major Market Retail Report
Major Market Retail Report is a study of Canadian retailer performance published by KubasPrimedia. It covers Canada's six largest retail markets, the Census Metropolitan Areas of Vancouver, Edmonton, Calgary, Toronto, Ottawa-Gatineau, and Montreal ("VECTOM"). MMRR 2011 examines 147 retailers, including department stores, mass merchants, and specialty retail chains. Store preferences across 33 product categories are analyzed, along with issues such as use of shopping information sources, interest in new retail developments, and perceived performance of specific retailers. The research is based on a survey of 1,520 consumers, which is statistically accurate to plus or minus 2.5%.
MMRR is available from KubasPrimedia. Further details are at kubas.com/mmrr.
KubasPrimedia, formerly Kubas Consultants, has served Canadian retailers since 1978 and is wholly owned by Canadian Primedia Sales & Marketing. Established in 2006, Primedia is the largest independent print and online rep house in Canada and represents more than 130 newspapers, magazines and websites in seven provinces in Canada.