3 Reasons Winmark Has its Sights Set on the Canadian Resale Market
With over one thousand units across the country, Minneapolis-based Winmark Corporation® has already seen plenty of growth within the United States. They have recently set their sights on continued growth in Canada, opening their first Style Encore® in the spring of 2017 and subsequently designating 40 more Canadian territories for Style Encore franchisees. Winmark also recently announced they are now franchising their Music Go Round® stores in Canada as well.
With an established base of Once Upon A Child, Play It Again Sports and Plato’s Closet locations, continued expansion in Canada is the natural next step for Winmark’s rapidly-growing retail concepts. The Canadian market is perfect for several reasons:
Canadian Consumer Demand
Canadian consumer behavior is extremely promising for retailers in the resale segment. Clothing, shoes and fashion accessories were the most exchanged second-hand products in Canada in 2016, accounting for 38.2 percent of the resale market. The Canadian market indicates plenty of demand for clothing resale concepts like Winmark’s Style Encore®, Plato’s Closet® and Once Upon A Child®.
Canadians also value saving money in their purchases, with 79 percent of Canadians agreeing that it’s important they get a good deal on things they buy. They also value environmental sustainability. According to the same survey, 80 percent of Canadians said they prioritize the environment in their lifestyle or shopping habits, and 72 percent said they feel it’s essential to recycle. As a result, prospective franchisees in the Canadian market should anticipate consistent consumer demand in the resale market.
Strong American Presence
The United States already has a strong presence within the Canadian marketplace, making for an easier expansion process. U.S.-based retailers account for 95 percent of retail sales by foreign retailers, according to a 2013 report by Canada’s Office of Consumer Affairs. Since the United States already dominates the foreign-based retail market in Canada, it is much easier for U.S. retailers to continue expansion, instead of trying to break into an entirely new market.
Canada’s resilience during the 2008 global recession also proved it was a favorable global marketplace for American and foreign investors. Canada experienced a relatively mild recession compared to other countries, only increasing the United States’ business expansion and presence in the country. The Canadian dollar remained strong, and high levels of sales per square foot of retail space continued throughout the global recession. This indicated strong housing markets and a healthy amount of disposable income per household. U.S. and foreign interests have already established Canada as a relatively safe and attractive market for expansion, even in tough economic times.
Cultural Similarities between the U.S. and Canada
In addition to a strong American presence in the market, cultural similarities between Canada and the U.S. will likely lead to a more manageable and seamless expansion process. The heavy American presence in Canada has been attributed to the close proximity of the two countries, a common language and shared popular culture. This means American retail concepts and store formats can smoothly and effectively transition into the Canadian retail marketplace. They also do not need to worry about learning and adapting to a new language or culture in most Canadian provinces and cities—as they would in other International markets.
Canada’s resale market is the perfect avenue for growth for Winmark Corporation, as they continue to look for new territories to help their franchisees succeed and expand. If you’re interested in becoming part of the Winmark family, visit our website or give us a call at (866) 595-0053.