Canadian Retail Sales Cooling Off


Share post:

Last year, in 2017, total Canadian retail sales growth was up 6.7%, a 20 year high. But the latest numbers from Statistics Canada show that sales gained 4.1% year-over-year in the first 2 months of 2018, significantly less. In fact, this soft patch appears to have started last December. 

As a result, the 3 month growth trend (orange line in the chart above) has sunk to a level lower than at any point last year. The underlying 12 month growth trend (green line) has now peaked out and is due to soften even more going forward. Poor spring weather across much of the country does not bode well for retail sales results in the next few months.  

The 3 month retail sales trend in the Food & Drug sector has now sunk to a 4 year low. The underlying 12 month trend has been softening since late 2016, and is poised to deteriorate further as we go deeper into 2018. 

Retail sales at supermarkets & other grocery stores represent half of this sector, but they were up by only 0.6% for the 3 months ending February 2018. Specialty food stores are doing well, with double digit sales gains in recent months, but this group is too small to offset the slow growth at mainstream supermarkets and grocers. 

After enjoying some high retail sales gains in 2016 and 2017, health & personal care stores have slowed down considerably. Their sales were actually down 0.1% year-over-year for the 3 months ending February 2018. Health & personal care stores at one time were the champions of the Food & Drug sector, but it appears those days are gone. 

The Store Merchandise sector seems to have run into some strong headwinds at the start of 2018, after having posted strong retail sales gains over much of last year. The 3 month sales growth trend has slowed to 4.6%, which is historically “not bad”, but now is running decidedly below the underlying 12 month trend. At this pace, the sector is unlikely to repeat its strong 2017 performance in 2018. 

The laggards in this sector include furniture and home furnishings stores (retail sales were up a meagre 0.3% for the 3 months ending February 2018), clothing and clothing accessories stores (up just 1.5%), and general merchandise stores (up a below average 2.6%). 

On the other side of the coin, electronics & appliance stores gained a huge 20.1% year-over-year for the 3 months ending February 2018, while building material & garden equipment/supplies dealers gained 7.8%. 

Note that Statistics Canada is now suppressing the breakdown of general merchandise stores for confidentiality reasons. The figures in the table below are estimates based on previous trends. 

The Automotive & Related sector is also weakening after a hot 2017. The 3 month trend has dropped off dramatically in last couple of months, although sales gains are still above the overall retail average. 

The main change is in new car dealers. Their year-over-year retail sales gain was just 2.8% for the 3 months ending February 2018, which is less than a third of the 9.4% increase recorded for 2017. 

This was partially offset by gas stations, whose retail sales increased 9.9% during the same period. This gain is all due to rising gasoline prices. 

By The Numbers

Special Note: Statistics Canada has made updates to 2017 numbers, and has also moved retail storefronts of telecom companies out of electronics & appliance stores and into a non-retail category, Telecommunications (NAICS 513). Retail trade statistics have been revised back to January 2012. 

For definitions of store types, see Statistics Canada NAICS

Canadian E-Commerce Stats

StatsCan started providing ecommerce retail sales data in January 2016. While the amount of data is limited, some trends appear to be emerging. Here are some results. 

Overall, e-commerce represented about 2.% of total Canadian retail sales for the 12 months ending February 2018, including both pure play operators as well as the online operations of brick & mortar stores. Canadian consumers however also buy online from foreign websites, spending which is not captured in these numbers. 

Canadian e-commerce sales were up 12.8% year-over-year for the 3 months ending February 2018. This however is significantly less than the 27.4% annual increase recorded for 2017 over 2016, implying that e-commerce sales growth may be slowing down. 

Note that location based retail is the same as that in the preceding large “By The Numbers” table. It’s what’s normally reported as Canadian retail sales. Except that it isn’t. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which covers electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending January 2018, electronic shopping and mail-order houses had an estimated $9.08 billion in e-commerce sales. 

But that’s not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending February 2018, this group had an estimated $6.93 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $16.02 billion in e-commerce sales by Canadian operators over the year. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include purchases made by foreigners at Canadian e-commerce businesses. 

For electronic shopping and mail-order houses, an estimated 85.3% of their sales are allocated to e-commerce. For the (mostly) bricks & mortar crowd, it can be estimated that just 1.2% of their total sales come from e-commerce. 

In the final section of the above table, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generated an estimated 56.7% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce is 43.3%. 

For more explanation on the e-commerce numbers, see Statistics Canada: Retail E-commerce in Canada

This analysis is updated monthly as new numbers are published by Statistics Canada. If you would like notification of when an update becomes available (and you’ve read this far), please connect with Ed Strapagiel on LinkedIn

Ed Strapagiel
Ed Strapagiel
This analysis is updated monthly as new numbers are published by Statistics Canada. If you would like notification from Linkedin of when an update becomes available (and you've read this far), please connect with Ed Strapagiel on LinkedIn.


Please enter your comment!
Please enter your name here

More From The Author



Subscribe to the Newsletter


* indicates required

Related articles

Consumer Loyalty Trends in Canada: The Crucial Role of Personalization in a Changing Economy [Video Interview]

A critical statistic reveals that 33% of consumers abandon brands that lack personalization, emphasizing the growing importance of tailoring experiences and offers to meet individual customer expectations in today's competitive market.

Ralph Lauren Expands in Canada with 1st Full-Price Luxury Store at Toronto’s Yorkdale Shopping Centre [Photos]

The US-based brand has opened a concept store featuring a mix of luxury and Polo products, and is expected to open more in Canada after launching an e-commerce site next month. 

Bayshore Shopping Centre in Ottawa Dominating Market and Adding Tenants Amid Sales Growth [Interview]

The landlord completed 77 leasing transactions totalling over 431,000 square feet in the past year, with more retailers and a redevelopment in the works.

Elevating Canadian Retail: How JLL’s Expertise Reshapes Property Management [Interviews]

Landlords are increasingly turning to JLL for pioneering property management solutions that prioritize both enhanced customer experiences and sustainability.

Mandy’s to Open Gourmet Salad Restaurant in Toronto’s Yorkville as Chain Expands [Exclusive Interview/Renderings]

The popular Montreal-based foodservice concept is growing its presence in Toronto with multiple locations, including one behind a soon-to-open Saint Laurent flagship store.

Gen Z’s Digital Upbringing Meets a Passion for Tangible Retail and Authentic Brands [Interview]

A new report on Gen Z, born between 1997 and 2012, provides insight into consumer behaviours as well as a look into the upcoming Generation Alpha.

Interview with Giant Tiger’s New CEO Gino DiGioacchino on the Future of the Iconic Canadian Retailer [Interview]

DiGioacchino speaks to Retail Insider after being appointed as the new President and CEO of Giant Tiger, and discusses the future of the business and importance of maintaining strong connections with local communities.

Purdys Chocolatier Expands Footprint with Pop-Up Stores [Interview]

The strategy involves providing customers with a taste of Purdys' renowned chocolates in areas where the brand hasn't had a presence before.

Colliers Report Emphasizes the Retail Advantage of Bridging the Digital-Physical Divide [Interview]

A recent report by Colliers Real Estate Management Services reveals that retailers who effectively blend their online and physical store operations are 35% more likely to achieve profitability, with the study emphasizes the importance of omnichannel strategies, convenience, property maintenance, and retailer-driven ESG initiatives.

Preview of ICSC@CANADA Conference 2023: Retail, Technology, and Networking Opportunities in Toronto [Interview]

Craig and Kyle Tomlin, Director of Events in Canada for ICSC, discuss the highly anticipated ICSC@CANADA 2023 conference, set to take place from October 2nd to 4th at the Metro Toronto Convention Centre North Hall in downtown Toronto.

Canadian Grocers Take a Page from Carrefour’s Playbook to Tackle ‘Shrinkflation [Op-Ed]

French supermarket chain Carrefour has labeled products impacted by reduced size, and similar measures may be adopted in Canada to enhance transparency in food pricing, says Sylvain Charlebois.

Jeweller Mejuri Debuts Personalized App and Innovative Membership Program; Plans Expansion with 5 New Stores [Co-Founder Interview]

The popular brand's personalized mobile app and membership program aim to enhance customer engagement and personalization, as Mejuri enters major markets with stores.