Canadian retail is dividing into two distinct markets that require two different kinds of leadership at once. Retail analyst Bruce Winder describes 2025 and 2026 as defined by a “K-shaped economy,” where affluent consumers continue to spend while a larger share of households shift toward discount retailers, according to his analysis reported by BNN Bloomberg. At the same time, luxury retail is one of the clearest growth areas in the country, with major developments including the redeveloped Vancouver Oakridge Park and continued expansion in Toronto’s Yorkdale and Bloor-Yorkville districts, according to Retail Insider’s 2026 market coverage. A retail executive in Canada right now may be managing a trading-down consumer base and a luxury growth story inside the same portfolio.
A merchandising role that didn’t need to exist two years ago
Portfolio retailers operating across both ends of the K are creating a role that simply wasn’t necessary before: VP of Merchandising, Cross-Segment. Until recently, a company with both value and premium banners ran two separate merchandising organisations, a VP for Value and a VP for Premium, because the customer logic was different enough to justify it. Now, with the same household sometimes shopping both ends within a single week, companies are consolidating these into one seat, and the search for that person is proving harder than expected, because deep expertise in one segment usually comes at the cost of credibility in the other.
A sourcing function moving out of the shadows
Tariffs imposed from March 2025 and the Canadian counter-tariffs that followed have disrupted supply chains and raised costs indirectly, even for retailers with no direct US import relationship, according to the Retail Council of Canada. This has elevated a function that used to sit quietly inside Supply Chain into its own reporting line: Director of Tariff-Exposed Sourcing, responsible for tracing indirect tariff exposure through components that pass through the US or other tariffed jurisdictions before reaching a Canadian shelf. It’s a research-heavy, almost forensic role, and it barely existed as a distinct job two years ago.
Roles and how they’re changing
| Role | What it used to require | What it requires now |
|---|---|---|
| VP of Merchandising, Cross-Segment | Two separate roles: Value and Premium | Fluency across both, as the same household increasingly shops both ends of the K |
| Director of Tariff-Exposed Sourcing | Folded into general Supply Chain function | Dedicated tracing of indirect tariff exposure through multi-jurisdictional supply chains |
| Head of Domestic Brand Development | Marketing-adjacent, low priority | Strategic priority role, building on “buy Canadian” sentiment while it lasts |
| Director of Destination Retail Partnerships | Real estate liaison, largely administrative | Active dealmaking role for luxury developers entering large-format destination projects |
What this bifurcation means for the shape of the industry
The K-shaped divide isn’t just a consumer story, it’s reshaping how retail businesses are structured at the ownership level. Multi-banner retailers are increasingly deciding whether to run value and luxury as genuinely separate business units with separate P&Ls, or to force integration under shared leadership. The companies choosing separation are, in Zavala Civitas’s view, likely to move faster in the next 18 months, because a single leadership team stretched across both ends of the K tends to under-serve one side while satisfying the other. Expect to see more formal separation of these business units through 2027, which will in turn create a second wave of demand for general management talent capable of running one segment with full P&L authority, distinct from the current wave of cross-segment merchandising hires.
Why searches built around a single consumer segment now underperform
Retail and consumer executive searches in Canada have traditionally been built around a single positioning, on the reasonable assumption that a leader’s experience should match the segment they will run. The K-shaped divide complicates that logic for any portfolio business operating across segments simultaneously. In Zavala Civitas’s experience, the strongest candidates are often executives who have managed segment transitions elsewhere, rather than executives with the longest tenure in either segment alone.
Methodology & Citations
Zavala Civitas combines market mapping across value and luxury segments with structured assessment of cross-segment leadership and tariff-exposed supply chain capabilities. The analysis is supported by market evidence from BNN Bloomberg, Retail Insider and the Retail Council of Canada.
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