According to the latest numbers from StatsCan, total Canadian location-based retail sales in Q1 2021 were up 10.7% from the same time last year, possibly an all-time record high. The worst of COVID-related retail sales declines last year were in Q2 however, so there may be more record high year-over-year gains to come in 2021. Note that “location-based” refers to bricks & mortar retailers but also includes their direct e-commerce sales. Pure play e-commerce operators’ retail sales were also up an estimated 78.2% in Q1 2021.
The 3 month growth trend (orange line in the above chart) is remaining strong, despite a mild setback at the start of the year. The underlying 12 month trend (green line) has now finally slipped into positive territory for the first time in a year, and is poised to improve further in the next few months.
The disparities among the major retail sectors however have become more pronounced. Food & Drug has softened abruptly, while Store Merchandise and Automotive & Related have just as abruptly shot up.
Food & Drug
Last year, the Food & Drug sector was the Cinderella story of Canadian retail, but things have changed now. The 3 month growth trend has cooled off to its lowest level in a year, and the underlying 12 month trend has reversed course after a very strong run in 2020. In Q1 2021, the sector’s retail sales were up 4.8% year-over-year, which is still quite respectable, but also significantly down from the 11.3% gain recorded in Q4 2020.
Retail sales at supermarkets & other grocery stores were up “only” 3.9% in Q1 2021. This is well down from the 12.6% gain made in the previous quarter.
The story for health & personal care stores was similar. Their year-over-year retail sales gain in Q1 2021 was 4.8%, significantly less than their 12.0% increase in Q4 2020.
The Store Merchandise sector has also experienced a reversal of fortune, but this time in the upward direction. Their retail sales were up a record high 15.0% in Q1 2021, a major recovery compared to just a 1.6% gain for all of last year. The underlying 12 month trend has now also strengthened to its highest level in two years.
A number of retailer types had double digit year-over-year sales increases in Q1 2021, including building material and garden equipment & supplies dealers (+35.6%), electronics & appliance stores (+22.6%), miscellaneous store retailers (+21.0%), furniture & home furnishings retailers (+18.7%), and general merchandise stores (+10.6%).
Clothing & clothing accessories stores have been a major weak spot in this sector. Their retail sales were still down 7.8% in Q1 2021, but this actually represents an improvement over the 26.7% decline suffered in 2020.
Automotive & Related
The Automotive & Related sector was a basket case for most of last year, but has roared back in March. For Q1 2021, retail sales spiked up to a 12.4% year-over-year gain. The underlying 12 month trend, although still in negative territory, has also improved.
New car dealers led the way. Their retail sales in Q1 2021 were up 17.7%, a significant recovery over the 12.5% decline recorded for all of 2020. In part, the current gain is because of poor sales performance a year ago.
At the same time, retail sales at gasoline stations became “less bad”. While their sales were down 4.9% in Q1 2021, this was better than the 18.5% decline experienced last year.
By The Numbers
Note that the data and analysis in this report are always based on not seasonally adjusted (or unadjusted) retail sales statistics.
Canadian E-Commerce Sales
E-commerce in Canada exploded last year due to the COVID-19 pandemic. This has continued into 2021, with e-commerce retail sales up 87.6% in Q1.
Overall, e-commerce represented about 6.7% of Canadian retail sales over the past 12 months, including both pure plays as well as bricks & clicks stores. 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. Over the 12 months ending March 2021, electronic shopping and mail-order houses had an estimated $26.3 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 March 2021, this group had an estimated $17.0 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $43.3 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 96.0% of their sales are currently allocated to e-commerce. For (mostly) bricks & mortar retailers, it can be estimated that 2.8% 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 60.7% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce was 39.3%.
For more explanation on the e-commerce numbers, see Statistics Canada: Retail E-commerce in Canada.
Monthly Update Notification
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.