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Unde rsta nding Ma jor E c onomic , De mog ra phic And Consume r T re nds In Ca na da John Williams December 1, 2011 Outline The Canadian Population The Canadian Population Retail Growth and Influence on Real Estate The New

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Unde rsta nding Ma jor E c onomic , De mog ra phic And Consume r T re nds In Ca na da

John Williams December 1, 2011

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Outline

 The Canadian Population  The Canadian Population  Retail Growth and Influence on Real Estate  The New Entrants  The Technology Effect

I Cl i

 In Closing

2
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T he Ca na dia n Popula tion T he Ca na dia n Popula tion

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Immig ra tion is Driving Ca na dia n Popula tion Immig ra tion is Driving Ca na dia n Popula tion Growth …

Source: Statistics Canada - Quarterly aggregated demographic components, July to September, 1975 to 2009, Canada
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d it Will b M i th F t … a nd it Will be More so in the F utur e

Source: Statistics Canada - Migratory and natural increase of the Canadian population, 1956 to 2056
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T h C t Pi t T he Curre nt Pic ture

5 44 6 19 30 35

I mmigrants Population less I mmigrants

% Change 2001 to 2006

+ 14% 5.44 6.19 20 25 + 14% llions 25.66 24.79 10 15 Mi 5 10

6

2001 2006

Source: Statistics Canada
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And T he y Are E mig ra ting F rom And T he y Are E mig ra ting F rom…

T

  • p T

e n Pla c e s of Birth for Immig ra nts T

  • Ca na da - (1991 to 2001 vs. 2001 to 2006)
11% 14% 12% 12% 14% 16%

1991-2001 2001-2006

9% 7% 7% 7% 8% 10% 3% 3% 3% 3% 3% 2% 1% 2% 5% 1% 4% 3% 1% 2% 4% 6% 1% 1% 0% China India Phillipines Hong Kong Sri Lanka Pakistan Taiwan U.S Iran Poland 7 H Source: Statistics Canada
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And Re siding in…

Percent of Total Population

8 Source: Statistics Canada 2006 Census & CSCA
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With Proje c te d Spe nding Implic a tions of With Proje c te d Spe nding Implic a tions of Ca na dia n Popula tion Gr

  • wth (2006–2026)

2,239

2,000 2,500

  • w th

ds)

t d

1,351 1,501

1 000 1,500

ulation Gro ( Thousand

s Retirees ees placement pending Career pending eens and Teens dlers and ri-Cycles

184 179 184

500 1,000

ected Popu 0 6 -2 0 2 6 (

Elders Active Pre-Retire Rep Sp C Sp Twe Tod Tr

  • 302
  • 500

< 9 10 19 20 34 35 54 55 64 65 75 75 +

Proje 2 0 0

P

9

< 9 10-19 20-34 35-54 55-64 65-75 75 +

Age Cohorts

Source: Statistics Canada
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Re ta il Growth a nd Its Re a l E sta te Influe nc e

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Ca na da ’s Re ta il Sa le s Ha ve He ld UP…

11 Sources: Statistics Canada
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Store T ype s: L e a de rs vs L a g g a rds Store T ype s: L e a de rs vs. L a g g a rds

(CAGR 2005–2010) – Ca na da

Leaders Laggards

12 Sources: Statistics Canada
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Re ta il Re a l E sta te F

  • rma t Growth*

Re ta il Re a l E sta te F

  • rma t Growth*…

(Gre a te r T

  • ronto Are a 2001 vs. 2009)

0s) r Area (000 Retail Floo

13 Sources: Centre for the Study of Commercial Activity – Ryerson University – Report 2011-02 * Floor Area (1,000s)

Growth Rate 9% 11% 78% 45%

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T he Cha ng ing Re ta il L a ndsc a pe – Ne w E ntra nts

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T he Ne w E ntra nts T he Ne w E ntra nts…

(Appa re l a nd Ge ne ra l Me rc ha ndise )

2000 – Major Players 2000 Players + Recent* + New Entrants Considering** Apparel & Accessories

  • Le Chateau
  • Roots
  • Le Chateau, Roots
  • Eddie Bauer
  • Eddie Bauer
  • The Gap Co.
  • Concepts
  • Reitman’s
  • Suzy Shier

Suzy Shier

  • American Eagle
  • Walmart, Sears
  • Walmart, Sears, The Bay,

General Merchandise ,

  • The Bay, Zellers

, , y, Zellers

15 * Launched in Canada within the past 5 years ** Retailer has not confirmed entry into Canadian market
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And T he ir Antic ipa te d Impa c t… .

$16

New Entrants

s)

}$80

(in billions

}$80

$7.6

(

16 *Estimated by JCWG NOTE: Retail sales for 2010 for All Stores less Autom otive w ere over $293 billion dollars
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T he T a rg e t E ffe c t – An Ove rvie w

  • 1,740 stores
  • 120,000 sq. ft. stores
  • Store sales = $65.6 Billion
  • E-comm sales =$1.2 Billion*
  • Household essentials
  • Hardlines
  • Apparel & accessories
  • Home furnishings
  • Home furnishings
  • Food & pet supplies
17 * 2010 Annual Report
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Ope ra tiona l Ove rvie w Ope ra tiona l Ove rvie w

Key Lines of Business*

S.W.O.T

Strengths

  • Brand awareness
  • Innovative
  • Trendy/up-to-date
  • Open multiple locations simultaneously

Opportunities

  • Extend brand
  • Test & refine
international strategy
  • Test small format stores~
  • Open multiple locations simultaneously
  • Presentation of merchandise
  • Carries both private~~and national
brands
  • Financially sound
  • Can leverage online approach
  • Test small format stores~
  • Introduce E-commerce
g pp
  • Will take share from WM, Winners &
Sears, The Bay and Loblaws (Joe Fresh)

Weaknesses

  • Limited knowledge of market place
  • First international market
  • Assuming Canadians will shop in same
manner as U.S. consumers

Threats

  • Will experience
significant competition from established players manner as U.S. consumers
  • Ability to obtain desired real estate
18 * 2010 Annual Report ~ Set to launch small format store in Chicago in 2012 ~~ Generates ½ of revenue from Private Brands
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T he T e c hnolog y E ffe c t T he T e c hnolog y E ffe c t

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Hig h Inte rne t Ac c e ss Ac ross All Me diums

I nternet Access ( all locations)

cent ( % )

Hom e I nternet Access

Perc

W ireless Access Sm artphone PDAs 20 Source: Ipsos Reid
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Ca na dia ns Buying More Online

$15 071 $15 300 $12,772 $15,071 $15,300

$14,000 $16,000

$7,924

$10,000 $12,000 $4 000 $6,000 $8,000 $0 $2,000 $4,000 Source: Statistics Canada * Includes Travel CAGR (14% )* 21 $0

2005 2007 2009 2010

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S t h P t ti I i Sma r tphone Pe ne tr a tion Inc re a sing

 1 in 3 mobile devices in Canada is a smartphone

*Source: Comscore 22
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A Glimpse of the F uture A Glimpse of the F uture

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Both Se a rs a nd P&G a re Also E xpe rime nting Both Se a rs a nd P&G a re Also E xpe rime nting with the F uture …

Sears Holdings enters the future of shopping with m obile walls* P&G takes to the subways to sell goods in Prauge, Czech Republic

24 *Source: RetailingToday.com – Nov 2011
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In Closing In Closing

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Wha t Do T he se Individua ls Ha ve In Wha t Do T he se Individua ls Ha ve In Common?

Tim othy Eaton Sol Price

26

Jeff Bezos

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T he y Are :

  • 27
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Thank you.

The R etail S hop. p

Chicago, Toronto www.j cwg.com (416) 921-4181

John Williams j williams@ j cwg.com