Retailers are feeling more confident than they have in years, and say improvements in customer service are helping to drive more sales. In data compiled from the third annual Canadian Retail Insights Report released today by American Express, the vast majority (82 per cent) of survey respondents cited better customer service experiences as the reason behind their jump in sales, and virtually all (97 per cent) said they are using customer service as a way to differentiate themselves from competitors.

Despite concerns about the health of the economy retailers remain optimistic and focused on growth. Eighty-four per cent of retailers said the financial outlook over the next 12 months is positive, the highest level seen since 2012, and representing a steady climb over the past three years (76 per cent in 2014 and 80 per cent in 2012 based on past year's survey results).

More than half (56 per cent) of those surveyed said their company's sales have grown significantly since 2014, while 28 per cent said sales have remained consistent.

Surveying decision makers in the gas, grocery, restaurant, fast food, and general retail sectors nationwide, the Report focuses on what's top of mind for Canadian merchants, including: the state of the industry; challenges and pain points; growth strategy; customer loyalty and acquisition; competition and strategies for attracting customers.

"In today's market consumers have more options than ever before, and to stay competitive we're seeing businesses make customer service a major priority," says Jennifer Hawkins, Vice President and General Manager of Merchant Services, American Express Canada. "Customer service has long been a key ingredient of successful companies and we understand this first hand. Not surprisingly nearly all retailers surveyed told us they are making efforts to improve service as a way to stand out from the pack, and in turn, grow loyalty and revenue."

Changing Canadian Retail Landscape: Greater Competition

The consensus among retailers (49 per cent) is that their industry is becoming more competitive. Nearly one third (30 per cent) are concerned about U.S. retailers moving to Canada, and even more (38 per cent) worry about the overall impact of the failure of large retailers has had on the retail landscape. Despite the positive outlook, when asked to specifically identify their top concern, 21 per cent called out the overall health of the economy.

Differences by Industry

The report also found that the experience for retailers differs by industry. For example, gas was the only sector not to list customer service as their top priority (82 per cent), opting instead for sales and promotions (86 per cent).  Significantly more businesses in the grocery (87 per cent vs 66 per cent) and restaurant (82 per cent vs 67 per cent) sectors are investing in improving customer service in 2015 than 2014.

While fast food is focusing on both hiring (49 per cent) and opening new stores (27 per cent), only nine per cent of retail respondents reported plans to open new stores in the coming year.