Canadian Retail Sales Start to Crawl Back: Ed Strapagiel

Date:

Share post:

Although Canadian retail sales are still in bad shape for the most part, there are signs that things are beginning to turn around, according to the latest data from StatsCan. There’s still a long way to go however, and we may never get back to the old pre-pandemic normal.

TOTAL LOCATION-BASED RETAIL SALES YEAR OVER YEAR % CHANGE

In Q2 of 2020, total Canadian retail sales declined 14.5% year-over-year. While this is probably the worst quarter ever, it’s actually not as bad as the previous 3 month average. The above chart shows a rebound in the 3 month average retail sales growth rate (orange line) and a corresponding bounce in the underlying 12 month trend (green line).

Perhaps better still is that retail sales for June alone were up 4.8% versus a year ago on an unadjusted basis. This comes after being down an average of 20.0 % over March to May.

 Food & Drug

FOOD AND DRUG RETAIL SALES YEAR OVER YEAR % CHANGE

The Food & Drug sector actually benefitted from COVID, because these retailers remained open, people were cooking and eating at home more, and shoppers were hoarding. This effect is now starting to cool off. Retail sales in Q2 were up an impressive 7.5% year-over-year, but the 3 month trend (orange line in the chart) now appears to be past its peak. While the underlying 12 month trend (green line) is still rising, it is likely to run out of steam in the coming months.

Supermarkets & other grocery stores had the strongest increase in Q2 2020. Their retail sales were up 14.0% year-over-year. Convenience stores also made a significant gain, up 13.7%.

Health and personal care stores however did not share the bounty. Their retail sales declined 4.3% in Q2. This category includes cosmetics, beauty supplies and perfume stores, opticians, and other retailers which may have been required to close due to the pandemic.

Store Merchandise

STORE MERCHANDISE RETAIL SALES YEAR OVER YEAR % CHANGE

The Store Merchandise sector appears to be much like retail overall. Retail sales were down 12.1% year-over-year in Q2 2020, but the 3 month trend is starting to reverse. In June alone, retail sales moved up 6.4% on an unadjusted basis versus a year ago. With stores and malls reopening, there’s likely to be at least a modest surge in sales as consumers do some catch up shopping, although this should not be seen as a return to business as usual.

General merchandise stores appear to be getting through the pandemic period in relatively good shape. Their sales were up 6.4% in Q2 2020, well ahead of the overall retail average. This group includes combination stores like Costco and Walmart which are also major food retailers, as well as larger operators like Canadian Tire and Hudson's Bay which may have more developed e-commerce capabilities.

On the other hand, clothing and clothing accessories stores are taking a beating, with retail sales down an astounding 57.7% in Q2. Many of these are mall based retailers, but malls were closed to the public. There is a high rate of bankruptcies and store closures in this group.

Other retail types in this sector also experienced huge sales declines in Q2. Home furnishings stores were down 38.2%, and sporting goods, hobby, book and music stores were off 23.2%.

AUTOMOTIVE AND RELATED RETAIL SALES YEAR OVER YEAR % CHANGE

As a sign of how bad things are in Automotive & Related, the bottom of the above chart had to be extended to minus 50%. In Q2 2020, sector retail sales were down 31.9% versus a year ago, including a 35.5% decline at gasoline stations and a 34.3% drop in sales at automobile dealers.

There is one light at the end of a long tunnel. In June alone, new car dealers managed a year-over-year sales increase of 5.3%. While this is a modest gain, it's far better than the steep sales declines recorded over March to May. Auto dealers appear to be finding ways to get some business done.

Gasoline station retail sales however continue to trend downward. From $5.5 billion in June 2019, retail sales declined to $4.4 billion in June 2020. That's a lot of loss to absorb.

By The Numbers

Special Note: Statistics Canada revised historical data with the February 2019 release. Unadjusted monthly data were revised back to January 2018, while seasonally adjusted data were revised back to January 2015. Those keeping score should update their files. The analysis in this report is always based on unadjusted data.

CANADIAN RETAIL SALES BY TYPE OF STORE

For definitions of store types, see Statistics Canada NAICS.

Canadian E-Commerce Sales

ECOMMERCE RETAIL SALES YEAR OVER YEAR % CHANGE

To show what's happening in e-commerce, note that the top of the above chart goes up to plus 110%. Canadian e-commerce sales were up 102.3% – double – year-over-year in Q2 2020. This may cool off somewhat once pandemic conditions subside, but it's unlikely that all of it will return to bricks and mortar shopping.

CANADIAN ECOMMERCE RETAIL SALES CHART

Overall, e-commerce represented about 4.5% of Canadian retail sales for the 12 months ending June 2020, including both pure play as well as brick & clicks stores. In June alone, e-commerce's share of total retail was up to 5.5%. Note that Canadian consumers may also buy online from foreign websites which is not captured in these numbers.

Location based retail is the same as that in the preceding "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 June 2020, electronic shopping and mail-order houses had an estimated $17.7 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 June 2020, this group had an estimated $10.9 billion in e-commerce sales. With electronic shopping and mail-order houses, there's a grand total of $28.6 billion in e-commerce sales by Canadian operators. 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 operations.

For electronic shopping and mail-order houses, an estimated 89.5% of their sales are allocated to e-commerce. For (mostly) bricks & mortar retailers, it can be estimated that 1.8% of their total sales are attributable to 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 62.0% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers' share of e-commerce was 38.0%.

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

Spanish Luxury Brand Loewe Enters Canada with 1st Standalone Store at Toronto’s Yorkdale Shopping Centre [Photos] 

The brand entered Canada through Nordstrom several years ago, and is now expanding in a big way with its first flagship storefront carrying Loewe’s entire product assortment. 

Upscale Vancouver-Based Sushi Restaurant Chain ‘Hello Nori’ Unveils Ambitious Global Expansion Plans [Interview]

The company has plans on expanding throughout Canada and into global markets with its popular hand-rolled sushi in elevated dining spaces.

Peavey Mart Spearheads Retail Revamp of Stores Across Canada while Launching Media Network 2nd Phase [Interview]

The Canadian farm and ranch retailer is focusing on updating stores across the country this year, while expanding its first-in-Canada retail media platform which includes digital radio and ads.

Innovative Direct-to-Consumer Furniture Startup CouchHaus Opens 1st Physical Retail Space in Vancouver [Interview]

The husband-wife team's modular furniture became so popular online that they are opening their own physical store, allowing customers to see the product-in person.

Canadians Look to Make Major Purchases in 2024 Despite Economic Uncertainty: Survey

Economic uncertainty isn't stopping Canadians from planning major purchases in 2024 according to a study, potentially giving retail a boost depending on the demographic.

Canada’s Agri-Food Sector Lacks Vision as Consumers Struggle with Grocery Prices [Op-Ed]

Canada's lack of cohesive vision and strategy for its agri-food sector, despite significant budget allocations, is stark contrast to the decisive approach evident in U.S. agricultural policy says Sylvain Charlebois.

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.

Chop Steakhouse Set to Open in Downtown Toronto, Continuing an Influx of New Restaurants to the Financial District [Feature]

Chop Steakhouse is joining a number of new restaurants and dining options that have opened recently in the Financial District, as the area starts the journey back from a pandemic that took a huge toll on the core.

Virtual Reality Arcade Concept ‘Ctrl V’ Expanding in Canada and the US Following Pandemic Setback [Interview]

The world's first and largest VR arcade franchise is opening new locations across Canada and the US, seeking spaces of about 4,000 square feet.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

Spanish Luxury Brand Loewe Enters Canada with 1st Standalone Store at Toronto’s Yorkdale Shopping Centre [Photos] 

The brand entered Canada through Nordstrom several years ago, and is now expanding in a big way with its first flagship storefront carrying Loewe’s entire product assortment. 

Upscale Vancouver-Based Sushi Restaurant Chain ‘Hello Nori’ Unveils Ambitious Global Expansion Plans [Interview]

The company has plans on expanding throughout Canada and into global markets with its popular hand-rolled sushi in elevated dining spaces.

Peavey Mart Spearheads Retail Revamp of Stores Across Canada while Launching Media Network 2nd Phase [Interview]

The Canadian farm and ranch retailer is focusing on updating stores across the country this year, while expanding its first-in-Canada retail media platform which includes digital radio and ads.

Innovative Direct-to-Consumer Furniture Startup CouchHaus Opens 1st Physical Retail Space in Vancouver [Interview]

The husband-wife team's modular furniture became so popular online that they are opening their own physical store, allowing customers to see the product-in person.

Canadians Look to Make Major Purchases in 2024 Despite Economic Uncertainty: Survey

Economic uncertainty isn't stopping Canadians from planning major purchases in 2024 according to a study, potentially giving retail a boost depending on the demographic.

Canada’s Agri-Food Sector Lacks Vision as Consumers Struggle with Grocery Prices [Op-Ed]

Canada's lack of cohesive vision and strategy for its agri-food sector, despite significant budget allocations, is stark contrast to the decisive approach evident in U.S. agricultural policy says Sylvain Charlebois.

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.

Chop Steakhouse Set to Open in Downtown Toronto, Continuing an Influx of New Restaurants to the Financial District [Feature]

Chop Steakhouse is joining a number of new restaurants and dining options that have opened recently in the Financial District, as the area starts the journey back from a pandemic that took a huge toll on the core.

Virtual Reality Arcade Concept ‘Ctrl V’ Expanding in Canada and the US Following Pandemic Setback [Interview]

The world's first and largest VR arcade franchise is opening new locations across Canada and the US, seeking spaces of about 4,000 square feet.