Canadian Tire’s Omnichannel Efforts Should Continue To Pay Off, but Competition Looms

Despite its iconic namesake banner, Canadian Tire faces intense competition in a changing sector. With shoppers embracing e-commerce, Canadian Tire faces top- and bottom-line strain as online retailers often economically offer a price and selection advantage. While the geographic dispersion of Canadian consumers impedes digital penetration due to shipping speeds and costs (giving Canadian Tire’s extensive store network an advantage), we expect urban and suburban shoppers to further embrace scaled digital sellers (such as Amazon) and large foreign brick-and-mortar chains (such as Walmart) that can leverage their infrastructure to Canadian Tire’s detriment. Although Canadian Tire did well to expand its digital order capacity during a pandemic-related sales surge, we believe its long-term challenges remain.