Economic Recovery Trends USA and Canadian Businesses

The retail industry employs more Canadians than any other sector, and it is made up of more small and medium-sized enterprises. It's no secret that e-commerce is causing significant transformation in the retail sector. However, the revolution does not end with internet purchasing. Entrepreneurs also face quickly changing consumer demands, increased rivalry, and the need to invest in new technology. New regulations for competitio Over the next decade, the retail industry will grow even more competitive. Canadians have already hit peak consumption, with a plethora of purchasing options in every category, and new competitors are entering the market due to the low cost of beginning a retail operation and increased overseas competition.

Big retailers will continue to dominate the mid-price sector, while evolving customer tastes will divide the market into two extremes: luxury and value.

Meeting the needs of future consumers Customers' demands and wishes are changing rapidly, and merchants must stay up by employing digital technologies to detect and track their preferences. For example, internet ratings and reviews will become increasingly vital for understanding customer expectations and exploiting them to obtain a competitive advantage. The Rise of the Experience Economy In what has come to be known as the experience economy, younger generations prefer to spend their money doing things rather than owning them. This tendency is causing retailers to consider how they can cater to "experiential" desires. Companies, for example, are including customers in product co-creation via online surveys, as well as supporting more in-store events and courses. Younger individuals prefer to spend their money on access to products and services over ownership. As a result, the sharing economy has grown in popularity, as has the practice of renting rather than owning. This trend reflects growing environmental consciousness, which is resulting in a demand for eco-friendly and reusable products. Location, digital, physical, and hybrid To be successful in the future, merchants must provide an outstanding customer experience across all channels digital, physical, and hybrid digital-physical.

Consumers are comfortable switching between digital and physical shopping, so creating a consistent brand experience across channels is critical for success.

The Canadian economy is operating above expectations. Despite increasing interest rates, Canada has dodged the recession that many had predicted. Inflation has decreased from its peak of 8.1% in June 2022 to 2.9% in January and 2.8% in February 2024. The labour market remains stable. Over 1.1 million more Canadians are employed today than before the epidemic, indicating the G7's quickest job recovery (Chart 1). Real wages (wages adjusted for inflation) have increased, implying that Canadians, on average, have more purchasing power. And our economy is growing, with data from Statistics Canada revealing that real GDP at basic prices increased by 0.6% in January (7.4% annualized), and preliminary estimates pointing to 0.4% growth in February (4.9% annualized), implying that growth in the first quarter of 2024 is expected to be around 3.5%. Private sector forecasts foresee significant progress in the coming year. They forecast economic growth to accelerate by the end of the year, interest rates to fall, and inflation to fall to around 2%. Both the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) predict that Canada will have the fastest economic growth in the G7 by 2025. At the same time, Canadians face hurdles as some of the most significant costs of living, such as groceries and housing, remain high. Too many Canadians are seeing their hard work go unrewarded. Our government will not leave them behind. We assist younger Canadians who are anxious that they will not achieve the same quality of living as prior generations. Millennials are now the largest Canadian generation, surpassing baby boomers in July 2023. The success of millennials in the workplace benefits Canada as a whole.

We will secure their success by improving innovation and productivity, which will raise salaries and create more excellent jobs, allowing Canada's economy to fulfill its full potential.

Ongoing investments, such as the Canada Child Benefit, affordable child care across Canada, housing building, and expanded benefits and pensions for seniors, are making life more affordable for Canadians and boosting access to housing. Investments in economic growth and competitiveness are already yielding results: Canada attracted the most per capita foreign direct investment in the G7 in the first three quarters of 2023 (Chart 2). Increased threats to the global economy necessitate cautious economic and budgetarymanagement. Inflation is high in many parts of the world, and there is doubt about how quickly interest rates may be reduced. Global wars, such as Russia's full-scale invasion of Ukraine and ongoing insurgent strikes on Red Sea shipping lanes, endanger commodity prices and global supply networks. The federal government is assisting Canadians while maintaining the lowest net debt and deficit-to-GDP ratios among the G7 countries and ensuring Canada's long-term budgetary viability. The government is working to strengthen the Canadian economy's ability to provide new opportunities for the present and future generations. The government is working to create excellent employment, raise Canadians' earnings, and expand the middle class. The government is committed to driving productivity growth and the adoption of clean technologies and artificial intelligence (AI), ensuring Canada's competitiveness as a business destination, and opening up opportunities for future generations. These are the next steps toward creating an economy that works for everyone, today and future.