Future Cities

Retail Markets in Focus: Toronto

Spotlighting North American retail markets with strong metrics and unique characteristics that attract occupiers and investors.

July 6, 2023 5 Minute Read


Robust population and job growth, combined with a resurgent tourism industry, are boosting retail sales and leasing activity in Toronto.

Significant Population Growth

Toronto’s population grew by 465,000 or 7.5% over the past five years, partly due to tech job creation that is attracting new residents. Toronto ranked third in CBRE’s 2022 Scoring Tech Talent report, with 44% year-over-year growth (+88,900 jobs). The metro area’s population is projected to grow by 9.8% from 2022 to 2027, more than the 18 other North American metros with populations of more than 4 million. Residential developers have responded. Housing starts in 2022 were up 8% year-over-year and 49% since 2019, according to Oxford Economics.

Figure 1: Toronto Historical & Forecast Population Growth Rate vs. Other Top Markets

Image of bar graph

Source: Oxford Economics, Q1 2023.

Retail Spending Gains

Canada has seen a significant increase in the number and average value of retail sales transactions from September 2019 to September 2022, according to Mastercard. The number of grocery sales transactions increased 5%, with the average transaction value up 15%. Restaurants had a 3% rise in sales transactions and almost 16% higher average transaction value. For discretionary retail, sales transactions grew 1% and average transaction value grew 8%.

Figure 2: Canada Retail Spending Growth, September 2022 vs. September 2019

Image of bar graph

Source: Mastercard.

Tourism Boost from China

Mainland China visitors to Toronto spent 126% more on luxury goods in March 2023 than in March of 2019, compared with the 74% increase in New York City, 42% in Chicago and 36% in Los Angeles. This has benefited Toronto’s high streets, notably the Bloor-Yorkville District. Leasing activity from newer high-end brands has increased in this district, alongside long-present luxury brands such as Dior and Prada. These newer occupiers include Arc’teryx, Canada Goose, Lululemon, Earls Collection and restaurant operators such as JOEY and Cactus Club Cafe.

In addition to tourism, the district benefits from being adjacent to the University of Toronto and its international students living nearby. Canada saw a 24% increase in international student permits from 2021 to 2022, with 52% of them in Ontario, according to Immigration, Refugees and Citizenship Canada.

Figure 3: Luxury Retail Spending Growth from Chinese Tourism, March 2019 vs. March 2023

Image of bar graph

Source: Mastercard.

Looking Ahead

Toronto’s retail market has rebounded solidly from pandemic-era challenges. Its large and growing population, strong job growth and economy, diverse shopping options and international tourism will encourage new retailers to establish and expand their presence.

Related Insights

Related Services