Item - 2026.TTC13.6

It is recommended that the TTC Board:

1. Endorse the strategic direction for TTC merchandise and licensing which includes:

a. Online Store Promotions and Enhancements
b. Vending Solutions
c. Retail Store Collaborations
d. Brand Licensing Partnerships

In 2025, the TTC made significant progress in revitalizing its TTC‑branded merchandise program through a renewed strategic focus. Key initiatives included strengthening business practices, introducing new and refreshed merchandise, delivering pop‑up retail activations, piloting partner collaborations, and exploring opportunities for continued program expansion.

At its meeting of June 23, 2025, the TTC Board directed staff to assess the feasibility of establishing a standalone TTC brick‑and‑mortar retail store at Davisville Station or another suitable location.

Based on this direction, staff conducted a comprehensive review of peer transit agencies, market interest, and the TTC’s current merchandise performance. The review suggests that, at this time, a standalone TTC brick‑and‑mortar retail location is not the most effective approach. Accordingly, staff recommend focusing efforts on strengthening existing merchandise channels and pursuing alternative opportunities to enhance the TTC’s presence within the branded merchandise space. The option of a standalone retail location will continue to be assessed as market conditions and program maturity evolve.

The TTC’s non‑fare revenue from merchandise and licensing has been limited to online sales and infrequent pop-up sales through the TTC Shop, with performance declining since 2020. This decline reflects reduced strategic focus and internal and third-party limited staffing capacity.

To address this decline, the TTC has implemented structured vendor management, strengthened operational processes, and initiated market testing of new revenue strategies, including retail expansion, vending solutions, collaborations, and brand licensing. These early actions have not only reignited revenue growth but have already driven results that surpass 2023 sales performance.

With continued investment in non-fare revenue efforts, the TTC stands to develop a branded revenue stream. In addition to direct revenue, merchandise programs enhance brand equity, which supports customer goodwill. Elevating Torontonians' allegiance through identity wear and product ownership mitigates reputational risk. When people demonstrate allegiance to a brand, they are more likely to engage in the brand community, express brand loyalty, and forgive occasional issues.

1. Royalty is the contracted percentage of net sales generated from applicable products sold on TTCShop.ca.
2. TTC Revenue is the royalty revenue paid by SVS Marketing to TTC, as documented on the TTC Invoices to SVS Marketing. Royalty revenue does not apply to all products.
3. TTC Shop Total Sales represents the gross value of all purchases, including subtotal, taxes, discounts, shipping, returns, fees, etc., as reported through SVS Marketing e-commerce platform.
4. Orders are defined as the total a completed customer checkouts that result in a confirmed purchase transaction, as reported through SVS Marketing e-commerce platform.

The Interim Chief Financial Officer has reviewed this report and agrees with the financial impact information.