Why Are So Many Big Retailers Closing in Ottawa?

“If you are shopping, can you buy me carrots?”

“I’m not at Food Basics, I’m at the CD and record shop.”

“…Wait, what? What year is this already?”

“Ah ah. They are closing down, last day. Just wanted to check out what was left. Wanna come? I’ll pick you up.”

And so Feng came back home and we drove to CD Warehouse on Merivale Road, like two teens in the 1990s. Even though I walked by the small shop a hundred times, I had never stopped by—I haven’t bought CDs in years and I’m not a collector. Every now and then, I used to marvel at the fact the shop was still standing, stuck between a Shawarma place and Value Village.

Well, not anymore, I guess.

Inside the shop, the inventory was almost gone. No more big names, just a few local bands, classical music and some country. I bought a “War is Over” t-shirt for a quarter (90% off!) and we left.

We are regular at liquidation sales now, not because we are dedicated bargain hunters but because stores keep on closing around here.

Just in the last month, MEXX, Smart Set and Futureshop have folded abruptly. I guess the pair of red cargo pants I bought at MEXX in 2005 is now a collector’s item.

And of course, there is the whole Target saga and the messy bankruptcy that followed. The American retailer came to Canada with much fanfare in 2013, taking over Zellers locations after the Canadian discount department retailer closed in 2012. Initially, many Canadians seemed excited by the prospect of shopping at Target—apparently, it had a good reputation in the U.S. But the retailer failed to deliver, and all too soon complaints poured in about higher prices and lower quality merchandise available.

We had a Target store in our neighbourhood where Zellers used to be, and I was among the curious consumers who checked it out when it finally opened after months of renovation work. The store was brand new: shiny floors, a fleet of smooth-running shopping carts and a cheery bright-red colour scheme. It even had a small Starbucks inside and this impressed me—definitely a step above Walmart’s partnership with McDonald’s! But the store lost its appeal really quickly. Prices were consistently higher than in other stores for the same products, many shelves were empty, product selection was poor and I couldn’t quite figure out what the perks of shopping at Target were—same products, same brands, higher prices.

Yet, I felt bad when Target announced that it was pulling out of Canada, closing 133 stores and affecting 17,600 employees. The stores had just been renovated, and a few hadn’t even opened yet, like the one in Bayshore Mall. It felt like such a failure.

We visited the nearest store several times last winter during the liquidation sale, almost remorseful—sorry, eh, it didn’t work out but we can stay friends, right? “Holy shit,” Feng noticed. “Even with 50% off, this store is still more expensive than anywhere else.” Right. Okay, no regrets, then.

Yet, whenever I walk by the now-defunct Target, I feel bad. Zellers and Target operated huge stores—we are not talking about a small mom-and-pop hole-in-the-wall business but thousands of square feet. It feels like a waste of a nice retail space.

And I’m not sure which “white knight” will be able to take over and convert the space, filling the void.

So, it is all buildings in the dark in Ottawa?

No, we still have places to go hide when the weather is bad. At the opposite end of the retail spectrum, the city’s main shopping malls—Saint Laurent, Rideau and Bayshore, among others—recently underwent renovation and welcomed new brands and companies. The redevelopment was rather drastic, especially at Rideau, the most central mall: new flooring, ceilings and lighting, a fancy food court and several high-end retailers such as Cartier, Tiffany & Co., Kate Spade, Coach, etc.

I was rather surprised to see Rideau turning into a fancy mall. Sure, it has a great location, close to the Parliament and many famous hotels and landmarks, but this is also the mall commuters speed through at the end of the workday and teens hang out after school. I can’t imagine any of them thinking “oh, let’s hit Booster Juice and check out these Cartier watches!”

The entire area around Lansdowne Park is also very fancy now. The newly redeveloped entertainment facility includes a number of outlets around, including a Whole Foods Market (I checked it out, I can see why it was dubbed “whole paycheck”), a Lindt Chocolate Boutique and The Sporting Life, high-end sporting goods and fashion store.

I know, Ottawa’s economy is fairly stable since the employment market largely consists of public sector employees. Yet, I can’t see the market for high-end products. Folks here are down to earth and tend to spend money on their suburban mausoleum… sorry, I mean, house, their cottage, family entertainment and cars—not on bling.

Maybe I’m naïve. I’m sure well-paid analysts wrote business plans and checked out the market this time… right?

If not, I’m in if Cartier or Tiffany ever holds a liquidation sale!