How Canada’s affordability crunch could help the Zellers revival

Zellers continues its revival with a new Toronto location, banking on nostalgia for the iconic Canadian retailer. John Vennavally-Rao reports.

TORONTO - Whether they were posing for photos with Zeddy the bear or lining up at the Zellers Diner food truck for a Big Z burger, many of the shoppers on hand for the latest Zellers opening seemed genuinely happy — both with the hit of nostalgia and the products on the shelves.

“When I saw Zeddy the big bear, I was super excited,” said shopper Ruth Merhead. “It was like seeing an old friend from back in the day.”

The new owners of the iconic brand opened the country’s second revived Zellers Thursday morning in Toronto, the latest step at a comeback.

Chris Aslandis came for the nostalgia — he even made his own button reading “bring back zellers” — but he’s also rooting for the chain to last.

“Hopefully it fills a need and is successful, because it’s a Canadian company and we need more Canadian companies to be more successful for sure,” he said.

The first Zellers opened almost a century ago in London, Ont. But the stores largely vanished in 2013, squeezed out by retail giants such as Walmart. Hudson’s Bay tried to revive the brand in 2023, only for that effort to collapse along with the Bay itself.

Now Zellers is under new ownership after the Benitah family — a fixture in Canadian retail for nearly 50 years — bought the rights to the brand last year. The family is also behind the apparel chains International Clothiers, Fairweather and Designer Depot.

Joey Benitah, Zellers’ chief operating officer, says the new stores are deliberately smaller than the originals. Keeping the product selection tighter, he says, lets them make the most of the space — and will be key to the brand’s long-term success.

At 25,000 square feet the Toronto store is far smaller than a classic Zellers, which Benitah estimates ran upwards of 80,000 square feet.

With so many Canadians struggling to make ends meet, analysts say the lower price point Zellers is known for may resonate with shoppers.

“We feel that right now is a great time to be bringing Zellers back,” said Benitah.

Erin Chau was quickly sold. Carrying a pile of shirts, she was impressed by the prices. “They are so good. These shirts are $20. That’s insane,” she said. “I got a bunch for my friends.”

Benitah says more stores are coming and hinted at possibilities. “Anywhere from Brampton, Ont., Scarborough, Ont., Ottawa, Halifax, Vancouver — we’re looking to be coast to coast," he said. He confirmed the company is eyeing some former Hudson’s Bay locations.

“The customer enthusiasm that we’re seeing here today — I mean, you see the smiling faces. It’s pretty incredible to see,” he said.

An affordable option for Canadians

Retail analysts say the moment may work in Zellers’ favour. Doug Stephens notes the trade dispute with the United States could help, because the chain is Canadian owned. “We really need a canadian player in the discount end of the market to give some consumers choice in terms of where they are buying and whether or not they are buying canadian,” he said.

Bruce Winder walked the aisles and came away “pleasantly surprised,” especially by the prices. “I think this could fit a niche,” he said —“families who are looking to buy clothing and home products on a really tight budget.”

He says the nostalgia is working too. “They’ve got Zeddy out front, they’ve got a food truck with all the same old food from the Zellers days, and it does feel like a Zellers when you walk in,” he said.

That timing could matter. “We all know there’s an affordability crisis for most Canadians, and these kind of stores do really well in an affordability crisis, so this could be a bit of a beachhead for them to expand in the market over time,” Winder said.

He sees it as part of a broader shift toward value. “If you look at the Dollarama, Giant Tiger, Costco, Walmart — they’ve all done really well being value players, so definitely this is a growth area within the market,” he said.

Still, he cautions it’s too early to call. “We’ll have to see how consumers shop the store once the initial pomp and circumstance dies down from the opening, but it definitely has a chance to succeed.”