Calgary Retail Market Report
Robust Economy Boosts Consumer Spending;
Vacancy to Tick up Amid Elevated New Supply
Sector fundamentals supported by healthy retail demand. During the first five months of 2023, Calgary saw significant growth in consumer demand. Total retail sales in Alberta swelled 7.5 per cent year-over-year within this period, the highest rate of increase in Canada. A strong job market, which benefited from still-elevated oil prices and the region’s booming population, was the main driver for this ballooning consumption. Consequently, the retail sector ended June with better-than-expected performance, with the vacancy rate registering a post-pandemic low of 2.6 per cent. For the remainder of 2023, while elevated interest rates may weigh on consumer spending, continued population growth should support retail space demand. Additionally, with the return to office revitalizing the downtown area, retailers in the urban core will likely see a greater increase in sales compared to their suburban counterparts. The downtown vacancy rate, which fell 290 basis points on an annual basis in the second quarter, will likely reach a new low by the end of 2023.