The latest data from StatsCan show a big recovery in Canadian retail sales. In Q2 2021, total overall sales were up 25.4% year-over-year. The 3 month growth trend (orange line in the chart below) has been at record breaking highs, and has pulled up the underlying 12 month trend (green line) along for the ride.
Note that hot current sales growth rates do not mean that good times are here again – it’s more of a reflection of how bad things were a year ago due to COVID. In Q2 2021, total retail sales were $173.8 billion, well up from $138.6 billion in Q2 2020, which itself however was well down from $162.7 billion in 2019. In other words, we’re just getting back to around where we were two years ago, in pre-pandemic times, plus a little inflation and population growth.
Retail conditions are still very much unsettled. The impact of the next COVID wave and/or variant is essentially unpredictable. There are also huge sales swings in every major retail sector.
Food & Drug
The Food & Drug sector actually posted record high retail sales increases last year as COVID rolled out. This was due to a mix of factors, such as staying open while other retailers were mandated to close, and highly restricted operating conditions for restaurants which promoted eating in over dining out. These circumstances now appear to have reached a plateau, and retail sales growth rates have returned to more typical levels. In Q2 2021, retail sales were up 2.7% year-over-year, or roughly at pre-pandemic levels.
There are some twists and turns here too. Supermarkets & other grocery stores’ retail sales were down 1.6% in Q2 versus last year, while convenience stores saw a sales decline 3.2%, even though both these retailer types had strong gains in 2020. On the other hand, specialty food stores are still hanging in with an 8.0% Q2 increase in retail sales.
Health & personal care stores are holding up the Food & Drug sector at this time. Their retail sales were up 11.7% year-over-year in Q2, which countered the bad news in food stores.
The Store Merchandise sector seems to be back with a vengeance, with year-over-year retail sales up 23.0% in Q2. As non-essential retailers and malls reopen for business, it seems that consumers are catching up on shopping needs they may have been putting off. Interestingly, the boom in e-commerce retail sales appears to be slowing somewhat at the same time.
Almost all store types in the sector had strong year-over-year retail sales gains in Q2. Clothing & accessories stores were up 64.5%, furniture & home furnishings retailers gained 55.4%, and sporting goods, hobby, book and music stores saw a 34.4% increase in retail sales. On the other hand, general merchandise stores only had a modest gain of 5.6%.
Automotive & Related
Retail sales in the Automotive & Related sector gained 52.9% year-over-year in Q2 2021. Much of this however is due to very weak year ago sales in 2020. In dollar terms, the sector’s Q2 retail sales are just slightly ahead of what they were in 2019. In other words, we’re just getting to where we were two years ago.
Sales at automobile dealers were up 61.1% year-over-year in Q2, again mostly because last year was so bad. Going forward, sales may slow due to production issues caused by a shortage of computer chips.
Gasoline stations also had a strong retail sales gain in Q2 with a 46.4% increase. This has been helped along by pump price increases and perhaps people driving around more (possibly to get to reopened retail stores!).
By The Numbers
Note that the data and analysis in this report are always based on not seasonally adjusted (or unadjusted) retail sales statistics.
For definitions of store types, see Statistics Canada NAICS
Canadian E-Commerce Sales
After hitting double digit and even triple digit increases in 2020, e-commerce retail sales gained only 5.8% year-over-year in Q2 2021, the lowest 3 month gain since StatsCan started reporting this data. Perhaps some consumers are switching back to in-store shopping for certain goods that they may have gone without due to pandemic closures.
Overall, e-commerce represented about 6.5% 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 June 2021, electronic shopping and mail-order houses had an estimated $26.5 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 2021, this group had an estimated $17.6 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $44.1 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 2.7% 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 60.1% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce was 39.9%.
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