Industry watchers say Canada's retail clothing sector is expected to slow in the coming few years even though the battle for luxury shoppers is revving up.
After two years of growth approaching 4%, sales are forecast to slow and bottom out to a mere 1% increase in 2018, according to Trendex North America, a marketing research firm specializing in the clothing industry.
This year's sales are expected to grow by 2.4% this year versus 3.8% last year, slipping to 1.7% growth in 2017 before inching back up to 2.1% growth in 2020, Trendex said in a 2016 retail apparel market forecast.
But that could prove optimistic because the organization's outlook for economic growth is much stronger than the Bank of Canada's revised forecast of 1.4%.
The low Canadian dollar is going to put pressure on retailers' margins and force them to offset higher costs by hiking prices, perhaps by 3% to 5%
But one industry expert says the luxury segment should help ease the sluggishness in the low- to mid-priced sector as Saks Fifth Avenue makes its Canadian entry this month with the opening of two Toronto stores, and U.S. retailer Nordstrom expands its presence with three new locations in Toronto this year and next.
Experts also say the openings will give wealthier Canadians a reason to shop at home instead of traveling to global fashion centres like New York, while also attracting Americans looking to take advantage of the low loonie.
