As Canada’s retail industry continues to evolve post-pandemic, labour and staffing remain front and centre for businesses grappling with shifting economic realities, worker expectations, and technological change. From declining job vacancies to an industry-wide push for skills-based hiring, 2025 is shaping up to be a transformative year for the retail workforce.
According to the latest data from Statistics Canada, employment fell by 29,000 (-1.0%) in wholesale and retail trade in March, partly offsetting an increase of 51,000 in February. On a year-over-year basis, the number of people working in wholesale and retail trade was little changed in March.
According to Statista, there were approximately 2.2 million retail trade employees in Canada in 2024, a slight decrease compared to the previous year.
Still, there is a degree of optimism brewing in the sector. Major retailers like Loblaw and Walmart Canada are investing heavily in workforce development. Earlier this year, Loblaw announced a $1.5 billion investment aimed at creating over 7,500 jobs across Canada, while Walmart Canada committed an additional $68 million toward wage increases and employee training.
These investments are being viewed as strategic moves to not only improve operations but to also attract and retain talent in a tight labour market. As inflation begins to ease and consumer confidence stabilizes, retailers are positioning themselves for a more sustainable growth trajectory.
But it’s clear there remains a wave of uncertainty.
Hudson’s Bay, Canada’s oldest retailer, is undergoing a significant restructuring that will see the closure of its 80 department stores, including 13 Saks OFF 5TH locations and three Saks Fifth Avenue stores across the country. This decision, approved by an Ontario court in March is part of a broader effort to address financial challenges such as reduced consumer spending, trade tensions, and declining downtown traffic.
Approximately 9,364 employees have been affected.
Retail analyst and author Bruce Winder said that during the pandemic, retailers faced a labour shortage and utilized a combination of technology, temporary foreign workers (TFWs) and international students to help fill the gap.
“Since then, as the economy has slowed and governments have tightened up policy on both TFWs and international students, retailers have tried to lower labour costs to offset higher costs-of-goods-sold and lower demand. Some have reduced hours of individual employees or are simply operating with less staff. At the same time, employee expectations have been reduced as work is harder to come by in this high unemployment market. Social media will continue to be a venting ground for retail employees to call out employer bad actors. Retention strategies are needed less in an over-supply labour market,” he explained.
Winder said skills-based hiring may bring lower formal education levels to the retail sector and open up a larger potential labour pool.
“As retailers hire more based on what you can demonstrate versus your education or title, barriers to entry for employees will be reduced. As large value-based retailers adapt to using more technology, some will assist employees with reskilling,” he said. “One must also contemplate the continued migration of employees from working at brick-and-mortar stores to e-commerce operations as the natural shift to online continues as demographics change.”
As legacy retailers like Hudson’s Bay exit the industry (or become reincarnated as smaller entities) we will see a temporary over-supply of retail workers who will either be re-deployed at other retailers, retire or change industries, added Winder.
“As Hudson’s Bay 9,000 + employees lose their jobs, there will be a ripple effect on other product and service businesses as these workers temporarily spend less. The exit of Hudson’s Bay could create additional construction jobs within commercial real estate as The Bay’s stores become repurposed.”
Winder said AI is changing the way retail operates in many ways. Most retailers are using AI to screen resumes and some are using AI to administer first interviews.
“AI can also be used to scrape social media and other digital footprints as part of the employee vetting process. Other areas such as scheduling, labour deployment and performance management/optimization are also using AI to improve results,” he explained.
“AI bots and AI agents, by definition, will reduce the number of frontline employees needed. These same tools can train new employees to get them up-to-speed quicker. The opportunities to use AI are almost limitless. Challenges include “paralysis by analysis” as some retailers may be overwhelmed with the amount of data at their fingertips and the fear of existing employees of being replaced with AI.”
George Minakakis, Founder and CEO of the Inception Retail Group, said Canadian retailers should shift from transactional employment models to more purpose-driven, flexible, and employee-centric strategies.
“The work culture is critical, and it has to be a great place to work and earn an income. It’s tough to recruit employees when business is slow and not interesting. That means fewer hours and unpredictable incomes,” he said.
“Retailers need to make it incumbent upon themselves to decide how they want to serve the public and then build their talent strategies around that. In my view, the labour shortages are more severe because there isn’t enough upward mobility in pay or roles. However, that could all be mitigated by developing ways for employees to continue to develop their skills and even participate in a brand’s success.
“Retailers can also tailor benefits and incentives to reflect the needs of part-time and gig-economy workers, adapting to today’s fluid employment preferences.”
As AI agents handle most transactional tasks, human-centred skills like empathy, adaptability, and relationship-building will become retail’s most valuable asset, explained Minakakis.
“Skills-based hiring will redefine frontline roles to ensure consistent execution. Retailers that overlook this will find themselves invisible behind their customers’ AI filters. Personalized and customized in-store experiences are becoming premium touchpoints,” he said.
“The future of retail isn’t just digital, it’s deeply human, supported by smarter training and reskilling pathways that empower workers to deliver something AI can’t. As it relates to reskilling, there is a cost associated with that and creating consistency; the retailers who have those financial and training capabilities will be stronger for it.”
Minakakis has always viewed retailing as an art, and if your art of retailing is not appealing, you face the same challenges as HBC and others who failed before them.
“Business failures displace thousands of employees and bring about more open commercial real estate in the retail sector every year. The larger-scale closures can also create structural shifts within existing large retailers who look for ways to mitigate business costs through the use of technology, so that more resources are directed toward keeping a brand relevant. That means the demand for talent will also evolve into less headcount within home offices which is inevitable, however some of those savings in productivity need to be redistributed to the frontlines where experiences and transactions matter,” he said.
“The loss of anchor tenants can impact smaller retailers who don’t have the brand drawing or even staying power. It is a big challenge to recruit a tenant in centers that are in more regional settings, and less foot traffic will make it even harder to replace large tenants.
“However, the loss of one more major retailer, while not good news, does make some of the displaced workers available for new opportunities. And retailers who are looking to improve their talent base should be pursuing this available talent.”
Minakakis said businesses in general may be using AI for scheduling and defining tasks that need to be completed and when, particularly in logistics and distribution hubs.
“With respect to recruitment, hiring from resumes comes with risks of bias and privacy issues. AI can help move away from static training models and create more on-demand learning, which would be advantageous if it can also lead to some kind of accreditation with third-party programs that can be leveraged by all retailers. But what AI can’t do is determine human behaviours, personal and cultural fit,” he said.
“I should point out that AI can enhance workplace productivity, strategic direction, innovation, and customer experiences in terms of insights with the right resources. And as I have been sharing with others about organizational redesign. Organizations will redefine work in three categories: creators, solvers, and executors; therefore, recruiting will likely form this way as well, especially in the retail sector.
“Retailing has many moving parts. You can create a great brand story, have a team of talented people, the right location, merchandise, and messaging. But if one of these is out of synch, everything is.”
Looking ahead, the industry is expected to continue its embrace of technology-driven staffing models, including AI-assisted recruitment, employee engagement platforms, and predictive analytics for scheduling and inventory management. These tools are being leveraged to boost efficiency and respond to the modern worker’s expectations for meaningful, tech-integrated employment.
In summary, Canadian retail in 2025 is a sector in transition. The challenges are real—labour shortages, retention issues, shifting customer expectations—but so are the opportunities. As businesses continue to invest in people, technology, and forward-thinking practices, the sector is poised not just to recover, but to redefine what retail work looks like in the years ahead.
Top Trends to Watch:
- Decline in retail job vacancies, hitting an 8-year low
- Growth in skills-based hiring practices
- Increased investment in employee reskilling over new hires
- Prioritization of wellness and work-life balance to boost retention
- Strategic job creation by national chains like Loblaw and Walmart Canada
- Greater use of AI in hiring and workforce development
Retail may be changing, but one thing is clear: people remain its most valuable asset.
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