Montréal retail insight

Sales and Foot Traffic Rise, However Inflation and Weak Return to Office Continue to Limit Potential Growth

August 10, 2023
  • William Schneider
  • Heli Brecailo
Foot traffic, students and tourists return to Montréal

Air travel in Montréal has seen a remarkable uptick, reaching levels rivaling pre-pandemic times. Admtl reported that from January to May this year, air passenger traffic at YUL airport exceeded the activity during the same period in 2022 by nearly 70%. Interestingly, air traffic in 2023 thus far has even surpassed the volume recorded in 2019, although only by two basis points. Despite fiscal worries tied to inflation and interest rate hikes, the absence of travel restrictions, combined with a strong desire for experiences caused by years of pent-up demand has resulted in favorable tourism conditions.

Hospitality data in Montréal paints a similar picture. According to AHGM and Tourisme Montréal, hotel occupancy in Q4 2022 stood at 68.4%, a mere 1.5% lower than in Q4 2019. It's worth noting that the current cost of renting a room in Montréal is 22% higher than in 2019, indicating a robust comeback for tourism, as well as sightseers' willingness to spend money in search of experiences in the city.

Thanks to a renewed interest in experiences, Montréal restaurants enjoyed a marked surge in visits in 2023. OpenTable data reveals that Montréal has outperformed both Toronto and Vancouver in terms of restaurant reservations, with a notable 12% increase between Q2 2022 and Q2 2023. In contrast, Toronto and Vancouver only experienced modest growth, each showing a mere 1% increase during the same period.

The growth in downtown foot traffic can also be attributed to the increased frequency of college and university students attending school onsite. Between Winter 2022 and Fall 2022, the proportion of in-person learning vs virtual learning increased by 9%, reaching 96%. The positive momentum spans multiple semesters and has enabled students to physically attend school at a pre-pandemic pace.

Downtown Montréal has witnessed the return of tourists and students to levels comparable to pre-pandemic times. However, the reintegration of office workers into their workplaces has been notably slower, indicating a lasting presence of hybrid work models. According to Altus, the adoption of fully onsite working policies among employers has experienced significant growth between Q1 2022 and Q1 2023, almost tripling from 5% to 13%. While the YoY increase is noteworthy, there is still vast progress needed to reach pre-pandemic workplace attendance levels. Unless office workers revert to their pre-2020 levels of workplace attendance, substantial growth in future foot traffic in downtown Montréal remains unlikely.

Local Market

Montréal’s retail leasing market has improved year-over-year, thanks to an increase in footfall as tourists, students and shoppers returned to the downtown core. The vacancy rate is still above pre-pandemic levels, however, progress has been made in recent quarters.

According to Statcan, net effective rents have rebounded and are now 3.8% higher than they were in 2019. Compared to Toronto and Vancouver, rental rate growth in Montréal has been tamer, with these cities seeing increases of 5.5% and 8.8% respectively over the same period. It’s expected that rents will increase in the coming quarters, however, the Bank of Canada’s fiscal tightening campaign may limit growth potential.

Early 2023 spending strong, potential troubles ahead

Seasonally unadjusted sales from January to April 2023 for both the province and Montréal remained positive. Overall, sales YTD compared to last year were up 7% for Montréal and 5.8% provincially. Double-digit sales growth drivers in Montréal included health and personal care (19.6%), shoes (14.7%), general merchandise (12.5%), motor vehicles and parts (11.9%), and clothing (11%). Smaller gains were observed in jewelry and leather goods (8.4%), grocery (6.9%), and food & beverage retailers (3.1%). The YoY sales growth is an encouraging sign of consumer resiliency, however, it’s important to acknowledge that until March 2022, Montréal’s restaurants, bars, casinos, and entertainment venues faced capacity limits and other restrictions, which had detrimental impacts on potential sales during that time.

Moreover, Statcan’s current projections for sales in May and June indicate an unfavorable outlook, suggesting that consumers may finally be ready to scale back their spending.

Nationally, sales to close out Q2 remained relatively stagnant. It appears that the Bank of Canada’s consumption softening efforts are starting to force shoppers to revise their spending habits. Additionally, the household savings rate continues to decline from pandemic highs, resulting in a more modest outlook for retail expenditures as the year’s end approaches.

As living expenses rise, consumers are expected to become more price-sensitive and value-oriented, opting to trade down where possible to cope with evolving economic conditions. This trend is already evident given the notable surge in sales Dollarama has been experiencing. The brand reported an impressive YoY increase of over 17% in same-store sales for the quarter ending in April. There were also 15% more transactions, demonstrating how shoppers are increasingly turning to Dollarama to find affordable options for consumables, basic groceries, and general merchandise to limit sticker shock and accommodate tighter budgets.

Montréal’s next luxury destination unveils updates

Recently, the developers of Royalmount - Montréal’s upcoming shopping and dining destination unveiled new updates about its tenants and development. Several luxury brands including Yves Saint Laurent, Jimmy Choo, and David Yurman will be establishing their first-ever stand-alone stores in Quebec. Furthermore, Michael Kors and TAG Heuer will also join Montréal’s next luxury hub in 2024, which will include over 170 stores and 60 restaurants once complete.

Seeking to boost its connectivity to Montréal’s transit system, Carbonleo has begun construction on a footbridge spanning over 200 meters that will connect the shopping district to the De la Savane metro station. Once complete, the pedestrian bridge is expected to accommodate nearly 10 million pedestrians annually and encourage car-free foot traffic.

REM links the South Shore to downtown Montréal

In late July, Montréal saw the long-awaited arrival of its most anticipated transit endeavor since 1966 – the REM LRT network. This significant milestone brought forth a portion of the network, linking the South Shore section via 5 stations to downtown Montréal. As a result, South Shore suburbanites can now access the heart of the city within 18 minutes.

Next year, the REM project will add more than a dozen new stations, significantly improving connectivity between the suburbs and Montréal’s downtown core. Among these stations, the McGill REM station is projected to be the network’s second busiest, accommodating around 25,000 commuters daily. The future station is expected to provide a boost to foot traffic and sales to both the Eaton Centre and retailers along Sainte-Catherine Street.

Sainte-Catherine Street Update

According to our Sainte-Catherine Street Retail Analysis, the street has adapted to changing spending habits. The street has seen an increase in its share of clothing and footwear operators on a 900-meter span between 2019 and 2023, which bodes well as these categories have been trending well in the GMA for the past few years.

Between Q2 2022 and Q1 2023, Montréal Centre Ville reported a 2% decrease in the street’s vacancy rate, while the urban mall vacancy rate experienced a more substantial drop of 7%, reaching 12%. Furthermore, pedestrian activity surged by an impressive 115% along three prominent intersections between Q1 2022 and Q1 2023, indicating a positive recovery in foot traffic.

These positive trends are expected to continue, supported by recent and upcoming developments. The opening of the new Nike store, the introduction of future REM stations, and an ongoing redevelopment project aimed at widening sidewalks and adding street furniture between Mansfield Street and Atwater Avenue will likely contribute to the continued growth and attractiveness of the area.


Overall, there have been many improvements in Montréal’s retail sector. Vacancies have decreased, while foot traffic and sales continued to climb. Consumers are starting to feel the effects of the Bank of Canada’s interest rate hike campaign; however, notable retail-friendly developments are currently underway, which will serve to facilitate and encourage commercial activity on the island and beyond.

Fill out this form to download report

There was an error submitting the form. Please try again.


Jones Lang LaSalle (JLL), together with its subsidiaries and affiliates, is a leading global provider of real estate and investment management services. We take our responsibility to protect the personal information provided to us seriously.

Generally the personal information we collect from you are for the purposes of dealing with your enquiry.

We endeavor to keep your personal information secure with appropriate level of security and keep for as long as we need it for legitimate business or legal reasons. We will then delete it safely and securely. For more information about how JLL processes your personal data, please view our privacy statement.