Canada Business News Archives

Canadian household debt ratios hit a record high over the spring, according to new figures released Thursday by Statistics Canada.

The ratio of household credit market debt to disposable income rose from 165.2 per cent in the first quarter of the year to 167.6 per cent in the second quarter. 

That means households held $1.68 in credit market debt for every dollar of disposable income, Statistics Canada said.

CANADIAN HOUSEHOLD DEBT RATIO

The figures show that in the April-June quarter, Canadians’ total household credit market debt — which includes consumer credit, and mortgage and non-mortgage loans — rose by two per cent, while disposable income increased by a weaker-than-normal 0.5 per cent.

BMO Capital Markets said the increase in the household debt ratio is consistent with the seasonal trend, as the second quarter is the strongest period for housing markets and mortgage debt growth. 

MARKETS-CANADA/CURRENCY

BMO Capital Markets says the upward trend in household debt goes back for the 26 years for which it has records and is showing no signs of slowing down. (Mark Blinch/Reuters)

BMO also said the upward trend in household debt goes back for the 26 years for which it has records and is showing no signs of slowing down.

“While it looks as though the Vancouver housing market is cooling after the foreign buyers’ tax was implemented, the Toronto market remains very strong, and others are showing signs of improving as well,” said BMO senior economist Benjamin Reitzes 

In a series of tweets, another economist took a different perspective and called debt-to-income misleading, as it ignores accumulated wealth. Trevor Tombe, an assistant professor of economics at the University of Calgary, said household debt is about 17 per cent of total assets, and that Canadian households have about $3 in financial assets per $1 of debt.

Statistics Canada said household net worth at market value was up 1.9 per cent in the second quarter to about $9.84 trillion. On a per capita basis, household net worth was $271,300.

The rise in net worth was chiefly due to gain of 2.2 per cent gain in the value of non-financial assets, mainly real estate, which increased on higher prices. Financial assets grew 1.7 per cent on stronger domestic and foreign securities markets. 

Meanwhile, total credit market debt climbed above $1.97 trillion at the end of the second quarter. Consumer credit was $585.8 billion, while mortgage debt stood at $1.29 trillion.

Walmart’s high-profile fight with credit company Visa is apparently still raging, as the retailer announced Thursday that all of its stores in Manitoba will no longer accept Visa cards starting next month.

Beginning Oct. 24, shoppers will no longer be able to use their Visa cards to pay for purchases in all 16 stores in the province. The move comes after Walmart began the phasing out process in July, when the retailer banned Visa cards from its three stores in Thunder Bay, Ont.

The move could spread to other Walmart locations in other provinces, a spokesman for Walmart said, without elaborating. The spokesman said Manitoba was selected for this round, because stores in the province are “most ready” to phase out Visa, again without elaborating.

Walmart has more than 400 stores across Canada. 

Walmart Visa 20160615

Canadian retailers pay among the highest interchange fees in the world. (Ryan Remiorz/Canadian Press)

For its part, Visa Canada described the retailer’s move as “disappointing.”

“We know from our experience in Thunder Bay that consumers want the option to use the payment method of their choice when shopping – including at Walmart stores,” a spokesperson for the company said, adding that ”Visa remains committed to actively working with Walmart so that Canadians can use their Visa cards wherever they wish to shop.”

The dispute between the two companies bubbled over in June, when Walmart announced its intention to phase out Visa unless it got a better deal on fees.

Walmart claims the fees Visa charges the retailer to process payments are too high, saying it pays more than $100 million a year in such charges and wants that number lowered. Visa, meanwhile, counters that Walmart already gets some of the lowest fees it has offered to any retailer in Canada.

“We’re committed to continuing negotiations with Visa, and we are still hopeful to reach an agreement‎,” the Walmart spokesman said.

The battle comes against a backdrop of increased scrutiny over interchange fees, a term used to describe the amounts that credit processors charge retailers for processing every transaction.

Typically, they are expressed as a percentage of the total value of the goods being sold. While shoppers don’t pay those fees directly, they are usually factored into the price, and Canadian interchange fees are among the highest in the world.

MasterCard and Visa control the vast majority of the market, and they agreed two years ago to cap their fees at an average of 1.5 per cent, something the Department of Finance acknowledged Wednesday that they have done — though it added that the government is still making a “further assessment” of the issue.

Even though they’ve come down a little, retailers say the fees are still unreasonably high.

“These excessive interchange rates mean that Canadian consumers pay at least $4.5 billion more for all credit purchases each year than they would if our rates were comparable to those in the EU,” said Karl Littler, vice-president of public affairs at the Retail Council of Canada.

“At the current 1.50 per cent average rate, over the four remaining years of the voluntary agreement, Canadians will pay at least $18 billion more than they should.”

According to research firm Value Penguin, interchange fees average 1.76 per cent in North America. In Europe, they average 0.96 per cent. In France, where they are heavily regulated, the average is as low as 0.22 per cent per transaction.

The president of the Retail Council of Canada says more needs to be done to level the playing field.

“Nobody gets a medal for clearing a two-foot bar,” Diane J. Brisebois said, referring to the recent move to an average of 1.5 per cent for interchange fees.

“The real issue is an absence of both competition and regulation that has allowed the credit card networks to overcharge merchants in Canada with fees five times what they should be.”

Walmart’s high-profile fight with credit company Visa is apparently still raging, as the retailer announced Thursday that all of its stores in Manitoba will no longer accept Visa cards starting next month.

Beginning Oct. 24, shoppers will no longer be able to use their Visa cards to pay for purchases in all 16 stores in the province. The move comes after Walmart began the phasing out process in July, when the retailer banned Visa cards from its three stores in Thunder Bay, Ont.

The move could spread to other Walmart locations in other provinces, a spokesman for Walmart said, without elaborating. The spokesman said Manitoba was selected for this round, because stores in the province are “most ready” to phase out Visa, again without elaborating.

Walmart has more than 400 stores across Canada. 

Walmart Visa 20160615

Canadian retailers pay among the highest interchange fees in the world. (Ryan Remiorz/Canadian Press)

For its part, Visa Canada described the retailer’s move as “disappointing.”

“We know from our experience in Thunder Bay that consumers want the option to use the payment method of their choice when shopping – including at Walmart stores,” a spokesperson for the company said, adding that ”Visa remains committed to actively working with Walmart so that Canadians can use their Visa cards wherever they wish to shop.”

The dispute between the two companies bubbled over in June, when Walmart announced its intention to phase out Visa unless it got a better deal on fees.

Walmart claims the fees Visa charges the retailer to process payments are too high, saying it pays more than $100 million a year in such charges and wants that number lowered. Visa, meanwhile, counters that Walmart already gets some of the lowest fees it has offered to any retailer in Canada.

“We’re committed to continuing negotiations with Visa, and we are still hopeful to reach an agreement‎,” the Walmart spokesman said.

The battle comes against a backdrop of increased scrutiny over interchange fees, a term used to describe the amounts that credit processors charge retailers for processing every transaction.

Typically, they are expressed as a percentage of the total value of the goods being sold. While shoppers don’t pay those fees directly, they are usually factored into the price, and Canadian interchange fees are among the highest in the world.

MasterCard and Visa control the vast majority of the market, and they agreed two years ago to cap their fees at an average of 1.5 per cent, something the Department of Finance acknowledged Wednesday that they have done — though it added that the government is still making a “further assessment” of the issue.

Even though they’ve come down a little, retailers say the fees are still unreasonably high.

“These excessive interchange rates mean that Canadian consumers pay at least $4.5 billion more for all credit purchases each year than they would if our rates were comparable to those in the EU,” said Karl Littler, vice-president of public affairs at the Retail Council of Canada.

“At the current 1.50 per cent average rate, over the four remaining years of the voluntary agreement, Canadians will pay at least $18 billion more than they should.”

According to research firm Value Penguin, interchange fees average 1.76 per cent in North America. In Europe, they average 0.96 per cent. In France, where they are heavily regulated, the average is as low as 0.22 per cent per transaction.

The president of the Retail Council of Canada says more needs to be done to level the playing field.

“Nobody gets a medal for clearing a two-foot bar,” Diane J. Brisebois said, referring to the recent move to an average of 1.5 per cent for interchange fees.

“The real issue is an absence of both competition and regulation that has allowed the credit card networks to overcharge merchants in Canada with fees five times what they should be.”

Walmart’s high-profile fight with credit company Visa is apparently still raging, as the retailer announced Thursday that all of its stores in Manitoba will no longer accept Visa cards starting next month.

Beginning Oct. 24, shoppers will no longer be able to use their Visa cards to pay for purchases in all 16 stores in the province. The move comes after Walmart began the phasing out process in July, when the retailer banned Visa cards from its three stores in Thunder Bay, Ont.

The move could spread to other Walmart locations in other provinces, a spokesman for Walmart said, without elaborating. The spokesman said Manitoba was selected for this round, because stores in the province are “most ready” to phase out Visa, again without elaborating.

Walmart has more than 400 stores across Canada. 

Walmart Visa 20160615

Canadian retailers pay among the highest interchange fees in the world. (Ryan Remiorz/Canadian Press)

For its part, Visa Canada described the retailer’s move as “disappointing.”

“We know from our experience in Thunder Bay that consumers want the option to use the payment method of their choice when shopping – including at Walmart stores,” a spokesperson for the company said, adding that ”Visa remains committed to actively working with Walmart so that Canadians can use their Visa cards wherever they wish to shop.”

The dispute between the two companies bubbled over in June, when Walmart announced its intention to phase out Visa unless it got a better deal on fees.

Walmart claims the fees Visa charges the retailer to process payments are too high, saying it pays more than $100 million a year in such charges and wants that number lowered. Visa, meanwhile, counters that Walmart already gets some of the lowest fees it has offered to any retailer in Canada.

“We’re committed to continuing negotiations with Visa, and we are still hopeful to reach an agreement‎,” the Walmart spokesman said.

The battle comes against a backdrop of increased scrutiny over interchange fees, a term used to describe the amounts that credit processors charge retailers for processing every transaction.

Typically, they are expressed as a percentage of the total value of the goods being sold. While shoppers don’t pay those fees directly, they are usually factored into the price, and Canadian interchange fees are among the highest in the world.

MasterCard and Visa control the vast majority of the market, and they agreed two years ago to cap their fees at an average of 1.5 per cent, something the Department of Finance acknowledged Wednesday that they have done — though it added that the government is still making a “further assessment” of the issue.

Even though they’ve come down a little, retailers say the fees are still unreasonably high.

“These excessive interchange rates mean that Canadian consumers pay at least $4.5 billion more for all credit purchases each year than they would if our rates were comparable to those in the EU,” said Karl Littler, vice-president of public affairs at the Retail Council of Canada.

“At the current 1.50 per cent average rate, over the four remaining years of the voluntary agreement, Canadians will pay at least $18 billion more than they should.”

According to research firm Value Penguin, interchange fees average 1.76 per cent in North America. In Europe, they average 0.96 per cent. In France, where they are heavily regulated, the average is as low as 0.22 per cent per transaction.

The president of the Retail Council of Canada says more needs to be done to level the playing field.

“Nobody gets a medal for clearing a two-foot bar,” Diane J. Brisebois said, referring to the recent move to an average of 1.5 per cent for interchange fees.

“The real issue is an absence of both competition and regulation that has allowed the credit card networks to overcharge merchants in Canada with fees five times what they should be.”

There won’t be wreaths of smoke wafting overhead at this weekend’s Cannabis Expo at the cavernous Vancouver Convention Centre West.

It’s all business for more than 130 industry exhibitors, who will welcome an expected 10,000 of the curious on Saturday and Sunday, a month after the federal government introduced new regulations governing medical marijuana use, and less than a year before the expected legalization of recreational use for adults.

For the marijuana industry in B.C. and Canada, it’s the calm before a commercial storm — selling pot for medicinal use will be dwarfed by the trade in pot for recreational users.

“The people who have been in the industry for a long time are seeing that they need to position themselves differently now that we are close to legalization,” said Natasha Raey of Vancouver-based Expo organizer Lift Cannabis. “The time for sort of rah-rah activism is starting to quiet down. This is the time for, let’s position ourselves as a real, professional industry, so that everyone takes us seriously.”

Lift chief engagement officer Natasha Raey.

Lift chief engagement officer Natasha Raey. Picasa / PROVINCE

Lift, an online meeting place for users and producers, organized a similar event in May that drew about 10,000 people at Toronto’s Convention Centre. Exhibitors in Vancouver include health-care professionals and entrepreneurs, among them cannabis producers licensed under the federal government’s Access to Cannabis for Medical Purposes Regulations, which took effect in August.

All the scrambling to get in at the ground floor of a — legally — new business calls to mind the heady days of the dot-com boom at the millennium’s turn. Welcome to the pot-com boom.

Among the events are a startup pitch competition, and a cannabis career fair. There will be tutorials on home growing, but this isn’t the event to come to for a contact high.

“We just try to show the industry through a more polished and professional view,” Raey said. “There will not be any cannabis displayed or for sale.”

Angling for a piece of the growing Canadian market is Vancouver-based Aurora Cannabis Inc., which serves 7,700 medical marijuana clients with product grown at a 55,000-square-foot facility northwest of Calgary. Aurora got its medical marijuana licence in November 2015, and began registering clients for its delivery service in January of this year. Clients must be verified by a health care practitioner under current law.

“All of our products are available to them online, over the phone, or through a mobile app that we just released this week,” said Neil Belot, Aurora’s chief brand officer.

Vancouver B.C. September 14, 2016 Reflecting on success Neil Belot is chief brand officer at Aurora Cannabis, which just completed a $23 million financing with securities firm Canaccord Genuity to expand its Canada-wide online cannabis delivery service in anticipation of the feds legalizing recreational use next spring here in Vancouver's Coal Harbour on September 14, 2016 Mark van Manen/ PNG Staff photographer Glen Schaefer-Province Vancouver Sun/ Feature /stories and Web. 00045091A [PNG Merlin Archive]

Reflecting on success Neil Belot is chief brand officer at Aurora Cannabis, which just completed a $23 million financing with securities firm Canaccord Genuity to expand its Canada-wide online cannabis delivery service in anticipation of the feds legalizing recreational use next spring here in Vancouver’s Coal Harbour on September 14, 2016. Mark van Manen / PNG

While Belot and others at the expo talk about medical marijuana users, the real prize is the anticipated legalization of marijuana in Canada by next spring for adult recreational use. Scheduled speakers include Dr. Mark Ware, a medical cannabis researcher at McGill University and vice-chair of the federal government’s Task Force on Marijuana Legalization and Regulation, announced in July.

“The future is definitely bright for the recreational users,” Belot said. “Whether the government decides to pilot it out with a national mail-order program, we would be well positioned to immediately jump into that.”

As to the scale of the recreational market, Belot said, “We’re talking orders of magnitude larger (than the market for medical users). I would say in the millions of potential clients.

“I look at it similar to the lifting of the prohibition of alcohol. The main difference is, this was 100 years longer, a lot more time for pent-up demand to build, and for the underground market to develop and establish. This is really about legitimizing what’s already been happening.”

Belot is an MBA who comes to the industry by way of Bay Street and a seven-year stint working for several ministries within the Ontario provincial government. He said Aurora, traded on the Canadian Securities Exchange, just completed a $23-million financing through securities firm Canaccord Genuity, aimed at bankrolling a bigger grow-op — a planned 600,000-square-foot Alberta greenhouse.

Aurora also recently acquired a company called Cannabis RX, which provides counselling on medical cannabis at 17 clinics in Ontario. Belot said they just opened a clinic in Alberta and more are planned across Canada.

“We’ve launched other innovative services such as same-day delivery,” Belot said. “In certain areas in Alberta, patients can actually register through our online portal, get approved, demo the app, place an order and receive the product at their front door within a matter of hours. It’s definitely a new world.”

Health Canada rules set in August allow Aurora to provide its medical clients with dried cannabis flowers, which can be smoked or vaporized. The new federal rules allow medical marijuana users to grow their own, and Aurora has a hand in that as well.

“We want to help people do their do their own home grow. We’re going be announcing more details about Home Grown solutions  by Aurora — providing starting materials, genetics for home growers, helping them access the system through our partnership with Cannabis RX, and also our ways to provide best-in-class home grown solutions.”

As with the earlier dot-com scramble, positioning seems to be the catchword going into the cannabis expo.

“There are a lot of brands starting to come out in the cannabis space,” said organizer Raey, who also comes from a business background with an MBA in health administration.

She acknowledged that the growing corporate presence marks a change in the marijuana world.

“It’s always a little scary to use the word corporatization,” said Raey, who describes herself as a conservative. “In the marijuana industry people are more into that sort of craft feel. That’s the thing we think about every day — what’s legalization going to look like and what are the players going to look like. But like any industry, you have farmers markets or grocery stores, people like to have choice.”

Tickets for the entire expo weekend are $15 if purchased online and $20 at the door. More information is at http://www.liftexpo.ca.

Rising energy prices, low interest rates, and federal stimulus will help Canadian economic growth “snap back” after a second-quarter contraction, RBC Economics said Wednesday.

The bank said it is looking for real annualized growth in Gross Domestic Product  of 3.7 per cent in the third quarter of 2016 as rebuilding takes place in Alberta following the devastating Fort McMurray wildfire. A slower 1.9 per cent gain is forecast for the fourth quarter.

Hurt by the Fort Mac fire and weakness in exports, the Canadian economy shrank by 1.6 per cent annualized in the second quarter — the largest quarterly decline in gross domestic product since the second quarter of 2009, when the country was in the throes of the financial crisis.

“The Alberta wildfires and sharp pullback in oil sands production in May took the Canadian economy on a brief detour into negative growth,” said Craig Wright, senior vice-president and chief economist at RBC.

“Yet the recovery should spur a similarly sharp rebound in growth in the latter half of this year and we anticipate that momentum will carry over into next year,” Wright said.

Back in July, when it released its most recent outlook for the economy, the Bank of Canada said it expected annualized growth of 3.5 per cent in the July to September period, followed by 2.8 per cent annualized rate for the final quarter of the year.

For the full year, RBC sees Canadian GDP growth accelerating to 1.8 per cent in 2017 from 1.3 per cent in 2016. The Bank of Canada’s latest outlook projects full-year growth for 2016 of 1.3 per cent, and 2.2 per cent next year.

RBC is forecasting oil prices will gradually rise to $50 US a barrel this year, and move up to $60 US per barrel in 2017.

However, the Canadian dollar, which was trading Wednesday at 75.75 cents US, isn’t expected to drive much benefit from a rise in crude prices.  An interest rate hike by U.S. Federal Reserve is likely in the first half of 2017, RBC said, which will give lift to the U.S. dollar while the Bank of Canada is expected to hold steady on rates here.

Rising energy prices, low interest rates, and federal stimulus will help Canadian economic growth “snap back” after a second-quarter contraction, RBC Economics said Wednesday.

The bank said it is looking for real annualized growth in Gross Domestic Product  of 3.7 per cent in the third quarter of 2016 as rebuilding takes place in Alberta following the devastating Fort McMurray wildfire. A slower 1.9 per cent gain is forecast for the fourth quarter.

Hurt by the Fort Mac fire and weakness in exports, the Canadian economy shrank by 1.6 per cent annualized in the second quarter — the largest quarterly decline in gross domestic product since the second quarter of 2009, when the country was in the throes of the financial crisis.

“The Alberta wildfires and sharp pullback in oil sands production in May took the Canadian economy on a brief detour into negative growth,” said Craig Wright, senior vice-president and chief economist at RBC.

“Yet the recovery should spur a similarly sharp rebound in growth in the latter half of this year and we anticipate that momentum will carry over into next year,” Wright said.

Back in July, when it released its most recent outlook for the economy, the Bank of Canada said it expected annualized growth of 3.5 per cent in the July to September period, followed by 2.8 per cent annualized rate for the final quarter of the year.

For the full year, RBC sees Canadian GDP growth accelerating to 1.8 per cent in 2017 from 1.3 per cent in 2016. The Bank of Canada’s latest outlook projects full-year growth for 2016 of 1.3 per cent, and 2.2 per cent next year.

RBC is forecasting oil prices will gradually rise to $50 US a barrel this year, and move up to $60 US per barrel in 2017.

However, the Canadian dollar, which was trading Wednesday at 75.75 cents US, isn’t expected to drive much benefit from a rise in crude prices.  An interest rate hike by U.S. Federal Reserve is likely in the first half of 2017, RBC said, which will give lift to the U.S. dollar while the Bank of Canada is expected to hold steady on rates here.

Rising energy prices, low interest rates, and federal stimulus will help Canadian economic growth “snap back” after a second-quarter contraction, RBC Economics said Wednesday.

The bank said it is looking for real annualized growth in Gross Domestic Product  of 3.7 per cent in the third quarter of 2016 as rebuilding takes place in Alberta following the devastating Fort McMurray wildfire. A slower 1.9 per cent gain is forecast for the fourth quarter.

Hurt by the Fort Mac fire and weakness in exports, the Canadian economy shrank by 1.6 per cent annualized in the second quarter — the largest quarterly decline in gross domestic product since the second quarter of 2009, when the country was in the throes of the financial crisis.

“The Alberta wildfires and sharp pullback in oil sands production in May took the Canadian economy on a brief detour into negative growth,” said Craig Wright, senior vice-president and chief economist at RBC.

“Yet the recovery should spur a similarly sharp rebound in growth in the latter half of this year and we anticipate that momentum will carry over into next year,” Wright said.

Back in July, when it released its most recent outlook for the economy, the Bank of Canada said it expected annualized growth of 3.5 per cent in the July to September period, followed by 2.8 per cent annualized rate for the final quarter of the year.

For the full year, RBC sees Canadian GDP growth accelerating to 1.8 per cent in 2017 from 1.3 per cent in 2016. The Bank of Canada’s latest outlook projects full-year growth for 2016 of 1.3 per cent, and 2.2 per cent next year.

RBC is forecasting oil prices will gradually rise to $50 US a barrel this year, and move up to $60 US per barrel in 2017.

However, the Canadian dollar, which was trading Wednesday at 75.75 cents US, isn’t expected to drive much benefit from a rise in crude prices.  An interest rate hike by U.S. Federal Reserve is likely in the first half of 2017, RBC said, which will give lift to the U.S. dollar while the Bank of Canada is expected to hold steady on rates here.

Fairfax Financial and CI Investments have agreed to buy retailer Golf Town from the chain’s U.S. parent, which is seeking protection from its creditors.

The deal is scheduled to close on Oct. 31. Fairfax and CI already own 40 per cent of the debt of Golfsmith International — Golf Town’s U.S. parent. 

Golf Town currently has 55 locations in Canada, but that number is expected to shrink as all Golf Town locations not included in Wednesday’s deal will be closed. It’s not immediately clear how many Golf Town locations the two Canadian investment firms are buying.

Ontario-based pension fund OMERS bought the then publicly traded Golf Town in 2007 for $240 million, and then added U.S.-based Golfsmith to the company for an additional $97 million US in 2012.

According to bankruptcy filings, Golfsmith today has liabilities of up to $500 million US. The chain is filing for creditor protection in the U.S. and Canada.

The chain has been caught up in an industry-wide financial crunch following a period of rapid expansion. While golf is still a popular pastime in Canada and the U.S., many apparel makers and sellers and individual courses have closed in recent years

“Golf Town seemed to buck that trend for the past 15 years,” said Marvin Ryder, a marketing professor at the DeGroote School of Business at McMaster University in Hamilton. “We saw Nike get out of the business earlier this year, so it’s no surprise to see a retailer is hurting — there’s just not enough demand to carry that big of a chain.”

Ryder said he thinks there’s probably a future for the chain, but on a much smaller scale. “The big-box store model requires a big turnover of equipment, shoes and clubs,” he said. 

While there are more rounds of golf being played today than ever before, those rounds are largely being played by the same people as few new players are taking up the sport. That means less demand for golf apparel and equipment that stores such as Golf Town sell.

“Even though golfers are very passionate, they’re still the same number,” Ryder said.

Fairfax Financial and CI Investments have agreed to buy retailer Golf Town from the chain’s U.S. parent, which is seeking protection from its creditors.

The deal is scheduled to close on Oct. 31. Fairfax and CI already own 40 per cent of the debt of Golfsmith International — Golf Town’s U.S. parent. 

Golf Town currently has 55 locations in Canada, but that number is expected to shrink as all Golf Town locations not included in Wednesday’s deal will be closed. It’s not immediately clear how many Golf Town locations the two Canadian investment firms are buying.

Ontario-based pension fund OMERS bought the then publicly traded Golf Town in 2007 for $240 million, and then added U.S.-based Golfsmith to the company for an additional $97 million US in 2012.

According to bankruptcy filings, Golfsmith today has liabilities of up to $500 million US. The chain is filing for creditor protection in the U.S. and Canada.

The chain has been caught up in an industry-wide financial crunch following a period of rapid expansion. While golf is still a popular pastime in Canada and the U.S., many apparel makers and sellers and individual courses have closed in recent years

“Golf Town seemed to buck that trend for the past 15 years,” said Marvin Ryder, a marketing professor at the DeGroote School of Business at McMaster University in Hamilton. “We saw Nike get out of the business earlier this year, so it’s no surprise to see a retailer is hurting — there’s just not enough demand to carry that big of a chain.”

Ryder said he thinks there’s probably a future for the chain, but on a much smaller scale. “The big-box store model requires a big turnover of equipment, shoes and clubs,” he said. 

While there are more rounds of golf being played today than ever before, those rounds are largely being played by the same people as few new players are taking up the sport. That means less demand for golf apparel and equipment that stores such as Golf Town sell.

“Even though golfers are very passionate, they’re still the same number,” Ryder said.

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