A retail marketing expert says Winnipeg's downtown Bay location must go upscale to have any chance at survival.

The department store's flagship eatery, the Paddlewheel Restaurant, shut down on Thursday after 58 years on the sixth floor.

The Zellers store, which opened in the basement of the store in 2010, will close in late March.

Prof. David Soberman at the University of Toronto's business school, says downtown department stores like The Bay have to move up, or move out.

Suburban big box stores are where people do their big shops now and the dinosaurs of downtown need to change to compete.

"For the Bay of course, they have downtown locations and unless they're able to evolve those locations into more of a sort of upscale shopping experience, it's going to be very difficult for them," Soberman said.

Even if they do manage to reinvent themselves, Soberman wouldn't be surprised to see Bay stores in smaller cities like Winnipeg and Regina still unable to keep going.

"You just don't simply have the traffic levels, perhaps, to sustain that kind of an upscale department store," he said.

"The people who are doing signifcant shopping trips are probably not going to go downtown to conduct that experience."

City has long ties to company

Winnipeg has a long connection with The Bay, which was incorporated in 1670 as the Hudson's Bay Company to support trade and development throughout the northern North American territory that is now Canada.

The first retail department store opened in the city in 1881 at the corner of Main Street and York Avenue. The current store has stood at the corner of Portage Avenue and Memorial Boulevard since Nov. 18, 1926.

In 1970, on the 300th birthday of the company — which shortened its named from The Hudson's Bay Company to The Bay in 1964 — head office functions were transferred from London, England, to Winnipeg.

As the company expanded into the east, head office functions were later moved to Toronto.

The Hudson's Bay Company Archives are located in the Manitoba Archives building on Vaughan Street, across from The Bay's parkade.

The records cover HBC history from the founding of the company in 1670, including business transactions, medical records, personal journals of officials, inventories, and company reports.

The Bay remains Canada's oldest continually operating company.