Canadian Tire's Store Network Should Enable Omnichannel Growth, but Competition Is Fierce

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 offer better prices and selection. 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 embrace scaled digital sellers (such as wide-moat Amazon) and large foreign brick-and-mortar chains (such as wide-moat 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 long-term challenges remain.