At the time of writing, North America and the world have become embroiled in a global economic crisis. Reports from the United States and Canada suggest that consumer spending is in decline. In the midst of this latest economic downturn, longer-term demographic trends are simultaneously reshaping consumer markets, the baby boomers are aging and taking their accumulated wealth along with them into retirement, while they consider the prospect of aging in place or elsewhere.
In the near term, consumers will likely become more and more price-sensitive, and supply chains (including labour) could be placed under stress to maintain and increase the profit margin from retail sales. The impact of the economic downturn will affect different retailers in different ways, given the competitive edge of large-format retailers, and the fact that smaller independents typically have greater difficulty "weathering the storm" (Jones and Doucet, 2000). Canada has seen previous cycles of retail innovation, in which the "old" are replaced by the "new" as markets stabilize. There is no reason to expect that over time, power retail will retain its dominance, particularly within Canada's suburban markets (Hernandez and Simmons, 2006). The questions remain: what will be the next structural manifestation of price, convenience, and accessibility, and what will be the geography of the next phase of retail innovation?
If recent evidence provides any indication, the future of power retail could include the development of some large-format stores in traditional downtowns (such as Best Buy and Canadian Tire, now located at Dundas and Yonge Streets in downtown Toronto), and the influx of large-format "brands" into smaller commercial spaces along traditional commercial strips (e.g., Sobeys Urban Fresh on Bloor Street in the Annex, and the new Urban Brick location in downtown Toronto) (see Strauss, 2008). Although the implications of this next cycle of retail innovation for the transportation system remain unclear, within the GTA and in Toronto in particular, consumer accessibility to retail in the traditional downtown includes a range of transport options and better integration with public transit.
Large-format development in traditional downtowns is not, however, a foregone conclusion to the process of suburban market saturation. The development of large retail spaces in or at the edge of the traditional downtown can be a risky enterprise -- for example, the Ontario Municipal Board recently disallowed the proposed retail redevelopment of the former Toronto Film Studio site on Eastern Avenue in the east end of the City of Toronto after five years of negotiation and dispute (Gray, 2009). At the same time, the decision represented a warning to municipalities that they need to have clear policies in place for the placement of large-format retailing.
Perhaps the broader issue for traditional downtowns will be maintaining retail heterogeneity (including the emergence and survival of independent retailers), and issues related to site design, neighbourhood vitality, and architectural heritage. These issues contrast somewhat with those of automobile use and land conversion that this report has described in relation to the GTA's suburban retail economy (although identifying the best possible use and site design for brownfield and greyfield sites is also an issue in the inner city).
Lastly, the changing demographics of the consumer market will affect retailing. Seniors typically have less income and mobility, and are therefore less inclined to purchase big-ticket items (Hernandez and Simmons, 2006). Less is known about what the most affluent and mobile "boomer" generation will do as it ages. One school of thought is that consumers will tire of the lack of services, longer-distance automobile trips, and poor-quality pedestrian environments typical of power centres and nodes; the advantage could shift toward more traditional retail formats (Hernandez and Simmons, 2006). Evidence of this sort of response from developers can already be found in the United States (Lorch, 2004).
The retail economy is clearly a moving target, characterized by cycles of growth and rapid change in formats. The Growth Plan as it stands does not adequately address the role of retailing in shaping the region's traffic flows and land use patterns, although the more recent work on planning for employment indicates increasing interest in tackling retail planning (MPIR, 2008). There is clearly a need to develop a flexible policy framework capable of responding to the changes in retail capacity and format that are currently leading to consumer behaviour that is incompatible with the longer-term sustainability and quality of life goals of the plan.