HALIFAX – Retail experts are voicing concerns over the potential decline of Hudson’s Bay Co. as a notable national retailer, labeling it a “historic loss.” This sentiment stems from the company’s struggles in attracting customers to its physical stores.
Jamie Hyodo, an assistant professor of consumer behavior at Western University, highlighted that Hudson's Bay, often referred to as "The Bay," has had difficulty adapting to evolving consumer shopping habits and preferences. Founded in 1670 as a fur-trading business, Hudson’s Bay enjoyed significant success throughout the 20th century, primarily serving as a comprehensive retail destination for Canadians seeking clothing, cosmetics, and home goods. However, Hyodo pointed out that the changing retail landscape since the 1960s and ’70s, characterized by the rise of discount retailers and standalone luxury brands, led to Hudson’s Bay losing both the low-end and high-end segments of its customer base.
Hyodo further noted the emergence of successful category-specific retailers, such as Best Buy and Home Depot, which dominate specific product segments. This shift in the retail environment has made it challenging for Hudson’s Bay to compete effectively in a market where its offerings are no longer distinctive.
Financial difficulties for Hudson’s Bay reached a critical point on March 7, when the retailer filed for creditor protection. The company attributed its hardships to subdued consumer spending, trade tensions between Canada and the U.S., and decreased foot traffic in downtown areas post-pandemic. The Bay is currently seeking court approval in Ontario to liquidate all but six of its 80 stores, along with three Saks Fifth Avenue locations and 13 Saks Off 5th stores in Canada, which it operates through a licensing agreement.
The plight of Hudson’s Bay is not unique, as Canada has witnessed the struggle of other prominent department stores. Eaton’s closed its doors in 2002, while Sears Canada ceased operations in 2018, and American retailer Nordstrom exited the Canadian market in 2023.
Despite a lingering fondness for the Hudson’s Bay brand—evident from the rush of customers to stores for its iconic striped products—the retailer is hindered by its large scale and failure to adapt to consumer demands for online shopping and engaging in-store experiences. Lisa Hutcheson, managing partner at J.C. Williams Group, critiqued Hudson's Bay for lacking a coherent strategy over the past decade, noting that consumers increasingly seek attractive and experiential retail environments, which The Bay has struggled to provide.
Hutcheson compared Hudson’s Bay unfavorably with successful brick-and-mortar retailers like Aritzia and Sephora, which have cultivated environments that entice shoppers through unique in-store experiences. She emphasized that these brands understand customer needs and leverage engaging window displays and services to attract and retain patrons.
Additionally, TJX Companies stores, such as Winners and Marshalls, have thrived in Canada by adopting smaller store formats and focusing on affordability, appealing to consumers mindful of their budgets. Hutcheson explained that consumers have become more value-conscious, gravitating towards retailers that offer lower prices rather than upscale shopping environments.
Though Hudson’s Bay may have wished to pivot to accommodate budget-conscious shoppers, Hyodo believes that proactive measures should have been taken decades ago to streamline inventory, reduce store sizes, and better align with targeted customer demographics. He asserted that creating a value offering that satisfies everyone could lead to disappointing results as the retailer fails to distinguish itself in a crowded market.
Experts also pointed out that Hudson’s Bay struggled to keep pace with an online shopping boom, arriving late to the digital marketplace compared to competitors. As a result, the company missed opportunities to connect with potential customers who preferred the convenience of online shopping.
Diane Brisebois, president and CEO of the Retail Council of Canada, commented that while Hudson’s Bay did attempt to engage younger shoppers who gravitated towards online platforms, its longstanding focus on an older demographic posed challenges. The onset of COVID-19 lockdowns and an increasingly competitive online landscape further complicated their efforts.
Hutcheson observed that in trying to shift to an e-commerce model, Hudson’s Bay lost sight of providing a positive in-store shopping experience. The company’s online platform was criticized for lack of integration with physical stores, failing to emphasize unique product offerings, and not aligning closely with competitors’ successful strategies.
She concluded that many other retailers successfully integrated social media with their shopping processes, whereas Hudson’s Bay lagged in this aspect, leading to further complications in adapting to new consumer expectations.
