The most recent retail sales numbers in Alberta indicate the province has finally surpassed the pre-recession peak reached in October 2014.
According to Statistics Canada, retail sales in Alberta grew both in April and May by 0.9 per cent and 1.6 respectively to $6.81 billion.
“The fact that retail sales in the province have increased in nine out of the last 10 months is welcome news for retailers and another sign that the recession of 2015/16 is in the rearview mirror,” says a report by ATB Financial’s Economics & Research Team.
“In per capita terms, Albertans outspent the rest of the country at retail stores by an average of $234 per month last year despite the economic downturn in the province. This gap is explained by a combination of factors – Alberta’s higher employment rate and higher average income – and highlights some of the underlying strengths of the provincial economy that remain in play even during recessionary periods.”
Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate in Calgary, says the impact of the economic slowdown that began in late 2014/early 2015 in Alberta had a short-term impact on retail sales in the province
“Within a matter of months consumer confidence and pre-downturn spending patterns had returned to a sort of new-normal,” he says. “Consumer preferences driven by a value-oriented state-of-mind swept over the local retail and food service industry. Restaurants from fine dining to quick/fast casual adapted to changing customer preferences.
“New stores and restaurants across the value spectrum continue to open across the greater Calgary regional district. The market appears to be less dependent on the oil and gas industry as we move forward with a more diversified economy and a get-on-with-it business attitude.”
According to Statistics Canada, the take-home pay of employed Albertans rose 1.7 per cent in May to $1,120 per week, which was the first year-over-year increase in the province since the spring of 2015. It is also the highest level of wages among the Canadian provinces.
“May’s wage report is yet another signal that shows Alberta is finding its feet after a tough couple of years.,” says ATB Financial.
Another sign of the retail recovery is in wholesale trade where Alberta recorded its seventh increase in eight months, according to StatsCan. Wholesale activity in the province reached $6.8 billion in May, growing by $289 million or 4.5 per cent from April. May’s total was the highest level since April 2015 and was the largest monthly dollar gain in Alberta since July 2013.
“May’s total wholesale number confirms that Alberta not only has a sturdy retail sector, but Alberta’s economy may be picking up a bit of steam,” added ATB Financial.
Kehoe says the greater Calgary region enjoys a quiet momentum and a feeling of prosperity knowing that it is the head office capital of Canada’s energy sector and the retail and distribution hub of Western Canada.
“Calgary’s shopping centre and retail store network is an ever-evolving component of the City’s infrastructure,” explains Kehoe. “It delivers goods and services to citizens and visitors across the region with new retail development driven by modest population growth and consumer demand.”