Canadian Retail Sales Continue Weakening Trend

Date:

Share post:


By Ed Strapagiel

The most recent Statistics Canada numbers show an uptick in Canadian retail sales in May 2018. Is this a turnaround? That’s not too likely. First of all, it’s not at all unusual to hit a particularly hot or cold retail sales month at any time, and one month does not a trend make. Secondly, and more importantly, the recent uptick was nowhere near enough to compensate for weak sales growth in the immediately preceding months. 

After 5 months, 2018 year-to date total Canadian retail sales are up 3.6%. That’s not great, and it’s significantly less than the 6.2% growth recorded after the first 5 months last year. 


total-retail.giftotal-retail.gif

The 3 month growth trend (orange line in the chart above) shows the recent uptick, but it’s still running well below the underlying 12 month trend (green line). At this rate, 2018 could end up being the slowest year in recent history.


Food & Drug


food-and-drug-retail.giffood-and-drug-retail.gif

Retail sales in the Food & Drug sector were up only 0.8% year-to-date through to May 2018, one of the lowest results ever for the first 5 months of a year. The 3 month growth trend (orange line) has declined unrelentingly since the middle of last year, and the underlying 12 month trend (green line) is following suit. 

The largest component of this sector is supermarkets & other grocery stores, but their retail sales were down 0.8% year-to-date. In contrast, retail sales at the small specialty food stores group were up 11.1%. 

At one time, health & personal care stores were the sales growth leaders in this sector. Those days appear to be over now. Their retail sales recorded a flat 0.0% change year-to-date after 5 months of 2018. 


Store Merchandise


store-merchandise-retail.gifstore-merchandise-retail.gif

After 5 months of 2018, year-to-date retail sales in the Store Merchandise sector were up 4.7%. This is “not bad”, but still not as good as the 6.5% annual gain recorded last year. 

The trend lines however are discouraging. The 3 month growth trend (orange line in the chart above) has been steadily weakening since about the middle of last year. The underlying 12 month trend (green line) peaked in Q1 2018 and is now starting a downward slide. 

On a year-to-date basis, only electronics & appliance stores are doing exceptionally well, with retail sales up 11.7% after 5 months of 2018. At the other end of the spectrum, shoe stores sales declined by 3.5%. Retail sales at general merchandise stores, which account for about 1/3 of the Store Merchandise sector, were up a relatively modest 2.8% year-to-date. 

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. 


Automotive & Related


automotive-retail.gifautomotive-retail.gif

Much of the accelerating growth rate of Canadian retail sales in 2016 and 2017 was due to The Automotive & Related sector. Since late last year however, the 3 month growth trend has significantly weakened. The underlying 12 month trend is now heading downward, about as fast as it came up in 2017. 

Sales at new car dealers appear to have suffered a major reversal of fortune. After 5 months of 2018, their year-to-date retail sales are up just 1.6%, after annual increases of 10.0% and 9.4% in the previous 2 years. Things are unlikely to turn around soon, given rising interest rates and possible tariff issues. 

Year-to-date retail sales were up 10.8% at gasoline stations after 5 months of 2018. This is all due to higher gas prices at the pump, rather than any real economic gain. Nevertheless, it helped to keep up overall retail sales numbers. 


download.pngdownload.png

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. 


retail-sales-Canada.gifretail-sales-Canada.gif

For definitions of store types, see Statistics Canada NAICS


download (4).jpgdownload (4).jpg

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. 


ecommerce-retail.gifecommerce-retail.gif

Overall, e-commerce represented about 2.7% of total Canadian retail sales for the 12 months ending May 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 which is not captured in these numbers. 

Canadian e-commerce sales were up 12.6% year-over-year for the 3 months ending May 2018, but this is much less than the 33.4% gain recorded in the same period a year ago. E-commerce retail sales gains are still in double digits, and are still much higher than for location based retail, but 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 includes electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending May 2018, electronic shopping and mail-order houses had an estimated $9.41 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 May 2018, this group had an estimated $7.08 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $16.50 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 e-commerce purchases made by foreigners at Canadian businesses. 

For electronic shopping and mail-order houses, an estimated 83.1% of their sales are allocated to e-commerce. For (mostly) bricks & mortar retailers, 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 57.1% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce is 42.9%. 

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

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From Retail Insider

Robson Street in Vancouver in Flux as New Retailers Prepare to Open Stores [Feature]

The street is seeing new retailers prepare to open, including a prominent corner that is about to see some very big changes and a potential luxury mall nearby cancelled.

Growing Crisis in Retail Inventory in Canada as Factory Direct Liquidates Stores [Interview]

The founder of A.D. Hennick & Associates says he's seeing overwhelming demand to liquidate inventory, indicating a concerning trend in the industry as more retailers look to insolvency.

Here’s What We Can Learn from Canada’s Response to Inflation in the 1980s and 1990s [Op-Ed]

Younger, poorer households have disproportionately suffered because their price index is skewed more toward food and shelter, say the authors.

Food Preferences in Canada Changing as Millennial and Gen Z Demographics Shift [Op-Ed]

Sylvain Charlebois discusses Canada's aging population and how younger consumers are shifting the grocery food landscape.

Henry Singer Unveils Downtown Edmonton Flagship Store at the ICE District, Featuring a Bar, Barber and Shoe Shine [Photos/Interview]

Jordan Singer discusses how the upscale menswear retailer recently relocated its Edmonton flagship store from Manulife Place into a 10,000 square foot space at the base of Western Canada's tallest building.

Canadian Retail Sales Dip: Year-End Drop in Discretionary Spending [J.C. Williams Group Analysis]

2023 Canadian retail sales ended in a lacklustre way, with controlled consumer spending amid a tumultuous year.

Landlord QuadReal Launches Pickleball Courts in Commercial Properties to Create Consumer Experience [Interview/Photos]

The initiative helps revitalize and re-imagine spaces using sustainable development practices, while incorporating the latest technology to enhance the visitor experience, blending physical and digital elements.

Canadian Consumers Willing to Switch Grocery Stores while Seeking Bargains: Study [Op-Ed]

Sylvain Charlebois says that a new survey offers a rigorous look into the preferences and behaviours shaping the future of grocery shopping in Canada.

Iconic Flo’s Diner in Toronto’s Yorkville Forced to Close After 33 Years Amid Landlord Dispute 

Retail Insider interviewed Flo’s co-owner who discusses the “heart wrenching” situation where he is being forced to close his business that began on Bellair Street in 1991.

Anatomy of a Leader: Teresa Spinelli, Owner of Alberta-Based Italian Centre Shop Ltd.

Spinelli discusses her leadership of the popular retailer which has expanded over the years, describing how she struggled to run the company at first and grew to love it.

Upscale Canadian Fashion Brand SMYTHE Expands with New Standalone Calgary Store [Interview/Photos]

It's the second store location for the Toronto-based brand, which is seeing success with its exclusive womenswear collections.

Toronto’s CF Sherway Gardens Hits Sales Milestone with Exciting Retail Growth and Future Plans [Interview]

The shopping centre is adding new retailers as sales per square foot hit an all-time high, with plans to re-tenant Nordstorm as foot traffic grows following Eataly's opening in the mall a few months ago.

ECS Coffee Opens Canada’s Largest Coffee and Espresso Equipment Gear Showroom and Retail Space in Toronto [Interview]

The new Etobicoke location is unique to Canada if not North America, according to its founder, with coffee roasting, equipment showroom, over 500 varieties of coffee, Youtube studio and various in-store experiences. He has plans to expand the concept nationally.

New Loblaws City Market Opens in Vancouver’s ‘The Post’ Building, Adding Grocery Competition to the Downtown Core [Podcast]

Craig and Lee discuss the opening of a new Loblaws City Market in downtown Vancouver's renovated Post building, and they explore its potential impact on local grocery shopping.

Loblaw Announces $2 Billion Investment in Canada for 2024 with Dozens of New Stores and 7,500 New Jobs [Expert Comment]

The retail behemoth will be growing substantially this year, following backlash over profits as inflation continues to impact Canadians.

Dubai-Based Asian Street Food Concept ‘Wok Boyz’ Expands into Canada with Plans for Multiple Locations [Interview]

The company's founder says the popular concept, with personalized meals, has an opportunity to grow substantially with its high-quality ingredients and theatrical flare, complete with fiery customer-facing woks.

Calgary Surge Basketball Team Launches Innovative Pop-Up at CF Chinook Centre to Boost Community Engagement [Interview]

The retail activation, which opened this month, is resulting in heavier foot traffic in a quieter part of the mall.

Upscale Pusateri’s Fine Foods to Close Yorkville Grocery Store in Toronto After 20 Years

The 5,500 square foot store opened to much fanfare in 2003, with valet parking, private chefs and pricey goods. 

Loblaw and Walmart Could be Forced to Adhere to Grocery Code of Conduct with Legislation [Op-Ed]

Sylvain Charlebois says that it's rare for all of Canada's political parties to agree, signalling a shift that could force grocers to comply amid record inflation.

Factory Direct to Shut All 14 Stores Amid Bankruptcy, Liquidation to Begin Saturday

The company, founded in 1995, is one of Canada’s largest privately owned discount retailers which struggled with declining sales and increasing costs following the pandemic.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

Robson Street in Vancouver in Flux as New Retailers Prepare to Open Stores [Feature]

The street is seeing new retailers prepare to open, including a prominent corner that is about to see some very big changes and a potential luxury mall nearby cancelled.

Growing Crisis in Retail Inventory in Canada as Factory Direct Liquidates Stores [Interview]

The founder of A.D. Hennick & Associates says he's seeing overwhelming demand to liquidate inventory, indicating a concerning trend in the industry as more retailers look to insolvency.

Here’s What We Can Learn from Canada’s Response to Inflation in the 1980s and 1990s [Op-Ed]

Younger, poorer households have disproportionately suffered because their price index is skewed more toward food and shelter, say the authors.

Food Preferences in Canada Changing as Millennial and Gen Z Demographics Shift [Op-Ed]

Sylvain Charlebois discusses Canada's aging population and how younger consumers are shifting the grocery food landscape.

Henry Singer Unveils Downtown Edmonton Flagship Store at the ICE District, Featuring a Bar, Barber and Shoe Shine [Photos/Interview]

Jordan Singer discusses how the upscale menswear retailer recently relocated its Edmonton flagship store from Manulife Place into a 10,000 square foot space at the base of Western Canada's tallest building.

Canadian Retail Sales Dip: Year-End Drop in Discretionary Spending [J.C. Williams Group Analysis]

2023 Canadian retail sales ended in a lacklustre way, with controlled consumer spending amid a tumultuous year.

Landlord QuadReal Launches Pickleball Courts in Commercial Properties to Create Consumer Experience [Interview/Photos]

The initiative helps revitalize and re-imagine spaces using sustainable development practices, while incorporating the latest technology to enhance the visitor experience, blending physical and digital elements.

Canadian Consumers Willing to Switch Grocery Stores while Seeking Bargains: Study [Op-Ed]

Sylvain Charlebois says that a new survey offers a rigorous look into the preferences and behaviours shaping the future of grocery shopping in Canada.

Iconic Flo’s Diner in Toronto’s Yorkville Forced to Close After 33 Years Amid Landlord Dispute 

Retail Insider interviewed Flo’s co-owner who discusses the “heart wrenching” situation where he is being forced to close his business that began on Bellair Street in 1991.

Anatomy of a Leader: Teresa Spinelli, Owner of Alberta-Based Italian Centre Shop Ltd.

Spinelli discusses her leadership of the popular retailer which has expanded over the years, describing how she struggled to run the company at first and grew to love it.

Upscale Canadian Fashion Brand SMYTHE Expands with New Standalone Calgary Store [Interview/Photos]

It's the second store location for the Toronto-based brand, which is seeing success with its exclusive womenswear collections.

Toronto’s CF Sherway Gardens Hits Sales Milestone with Exciting Retail Growth and Future Plans [Interview]

The shopping centre is adding new retailers as sales per square foot hit an all-time high, with plans to re-tenant Nordstorm as foot traffic grows following Eataly's opening in the mall a few months ago.

ECS Coffee Opens Canada’s Largest Coffee and Espresso Equipment Gear Showroom and Retail Space in Toronto [Interview]

The new Etobicoke location is unique to Canada if not North America, according to its founder, with coffee roasting, equipment showroom, over 500 varieties of coffee, Youtube studio and various in-store experiences. He has plans to expand the concept nationally.

New Loblaws City Market Opens in Vancouver’s ‘The Post’ Building, Adding Grocery Competition to the Downtown Core [Podcast]

Craig and Lee discuss the opening of a new Loblaws City Market in downtown Vancouver's renovated Post building, and they explore its potential impact on local grocery shopping.

Loblaw Announces $2 Billion Investment in Canada for 2024 with Dozens of New Stores and 7,500 New Jobs [Expert Comment]

The retail behemoth will be growing substantially this year, following backlash over profits as inflation continues to impact Canadians.

Dubai-Based Asian Street Food Concept ‘Wok Boyz’ Expands into Canada with Plans for Multiple Locations [Interview]

The company's founder says the popular concept, with personalized meals, has an opportunity to grow substantially with its high-quality ingredients and theatrical flare, complete with fiery customer-facing woks.

Calgary Surge Basketball Team Launches Innovative Pop-Up at CF Chinook Centre to Boost Community Engagement [Interview]

The retail activation, which opened this month, is resulting in heavier foot traffic in a quieter part of the mall.

Upscale Pusateri’s Fine Foods to Close Yorkville Grocery Store in Toronto After 20 Years

The 5,500 square foot store opened to much fanfare in 2003, with valet parking, private chefs and pricey goods. 

Loblaw and Walmart Could be Forced to Adhere to Grocery Code of Conduct with Legislation [Op-Ed]

Sylvain Charlebois says that it's rare for all of Canada's political parties to agree, signalling a shift that could force grocers to comply amid record inflation.

Factory Direct to Shut All 14 Stores Amid Bankruptcy, Liquidation to Begin Saturday

The company, founded in 1995, is one of Canada’s largest privately owned discount retailers which struggled with declining sales and increasing costs following the pandemic.