Investors track K-shaped demand, tighter privacy expectations and mall strain from e-commerce
Affluent Canadians are still spending, but everyone else is trading down – and that gap is now driving which retailers, asset classes and geographies look resilient heading into 2026.
Retail analyst Bruce Winder told BNN Bloomberg that a “K-shaped” economy defined 2025, with “almost like a two tiered economy, depending on how affluent you are,” which in turn dictates “what products, what retailers, what services, are doing well, versus which ones are struggling.”
According to Winder, wealthier consumers continue to spend, while many others have moved to the bottom of the K, shopping at banners such as No Frills and Dollarama.
Jessica Ramirez, co-founder and managing director at the Consumer Collective, told BNN Bloomberg that “the consumer is shaky” and that “the consumer that was most hit was middle income and low income.”
She said many of these households are either “out of savings or have been dipping into savings,” and are using “buy now, pay later options” on their credit cards, which creates new debt on top of higher living costs.
Ramirez added that higher-income consumers remain active but are “being quite cautious,” and have started “trading down” in some areas such as groceries, even as luxury jewellery continues to perform well.
Looking toward 2026, Winder told BNN Bloomberg that tariffs are already weighing on sentiment and costs.
He said the threat of tariffs has made some shoppers more nervous about spending because of job uncertainty in steel, automotive and aluminum-related industries, noting “they don’t know if they’re going to have a job in the future.”
Winder also said tariffs can “import” inflation into Canada through supply chains.
He pointed out that Canadian retailers often buy products in the US, and US input costs rise when components or finished goods come from tariff-exposed regions such as parts of Southeast Asia, which “imported a little bit of inflation into our country too.”
Despite the pandemic-driven rise in e-commerce, Winder told BNN Bloomberg that “brick-and-mortar is still 80 to 85 percent of retail sales,” with stores retaining an advantage for experiences like trying on products and getting in-person service.
At the same time, Amazon’s logistics push is changing how often consumers need to visit stores at all.
Winder said Amazon’s rapid delivery is a key driver of behaviour, noting that in Toronto, Ottawa and Hamilton, “you can get it four times a day.”
He added that this makes it “a smaller reason now as to why you need to go to brick-and-mortar stores.”
Winder highlighted Amazon’s scale, saying the company has invested about $65bn in Canada since 2010 and now has roughly 46,000 employees and 70 facilities.
According to the latest TELUS Data Trust Survey, Canadians and Americans are increasingly pausing when retailers ask for personal information, such as an email for a receipt or a phone number for delivery updates, and are asking what they receive in return and how companies use their data.
TELUS reported that 78 percent of Canadians and 80 percent of Americans are more likely to buy from companies they trust, and that 70 percent of Canadians and 72 percent of Americans actively factor respect for data privacy into whether they trust a company.
Confidence remains low.
TELUS said only 39 percent of Canadians believe Canadian organizations respect data privacy, and just 19 percent say the same about American organizations.
In the US, 37 percent of respondents believe US organizations respect data privacy and 31 percent say they believe Canadian organizations do.
TELUS also found that 66 percent of Canadians and 71 percent of Americans now prioritize data privacy and trust over convenience.
Pam Snively, chief data and trust officer at TELUS, said “people know their data has value, and they’re choosing to do business with companies that treat it with respect,” adding that “the companies that prioritize privacy will earn and keep customer trust - and their business.”
TELUS reported that 85 percent of Canadians and 86 percent of Americans want privacy policies in a user-friendly format, and 90 percent of Canadians and 91 percent of Americans want transparency about how personal information is used.
On governance, TELUS said 86 percent of Canadians and 87 percent of Americans are more willing to trust companies with data ethics experts on staff, and that 60 percent of Canadians and 65 percent of Americans trust companies more when they provide data literacy training for employees.
Responsible AI is part of that expectation.
TELUS found that 85 percent of Canadians and 86 percent of Americans want companies to commit to responsible AI use, which lines up with Winder’s view that 2025 marked an early shift in how consumers discover products.
He told BNN Bloomberg that AI agents like Perplexity, Google’s Gemini and Amazon’s Rufus can search the internet, recommend products, compare prices and “do a lot of the heavy lifting for you,” while also forecasting demand based on spending patterns.
Snively said that when consumers trust a company, “they’re more willing to share information that improves their experience — whether that’s personalized recommendations, faster service, or products tailored to their needs. But that trust has to be earned.”
On the real estate side, Winder told BNN Bloomberg that mall owners are struggling to replace major anchors. “It’s really difficult for malls to fill that space with anchor tenants,” he said.
He noted that some landlords are breaking up large spaces or bringing in unconventional occupiers such as car dealerships, pickleball courts or service providers.
According to Winder, marquee centres like Toronto’s Eaton Centre can still attract tenants, but many suburban “B and C” malls are struggling to backfill space, leaving a more polarized physical retail landscape that mirrors the underlying K-shaped economy.
