Total Canadian location-based retail sales were up 5.2% for the 3 months ending October 2021, according to the latest data release from Statistics Canada. This is close to the long term average after the wild swings caused by the COVID pandemic. On the other hand, gasoline prices are holding up retail sales. Without gas stations, retail sales for the period gained only 3.0%.
The 3 month trend (orange line in the chart below) has weakened for the last few months, while the underlying 12 month trend (green line) has leveled off and is starting to decline.
And that’s not all. There’s a big fly in the ointment that goes by the name of Omicron. Its impact is not reflected in the numbers yet.
Food & Drug
Retail sales gains in the Food & Drug sector have been weakening all year. For the 3 months ending October, sales were up a mere 0.01%, which means falling behind inflation and population growth. The underlying 12 month trend has also been steadily slipping and is likely to decline even further before the year is done.
Sales at supermarkets & other grocery stores were actually down 0.9% year-over-year for the 3 months ending October. Specialty food stores had a 3.5% retail sales gain, somewhat better but still modest by historical standards. Perhaps food store sales will improve somewhat as Omicron keeps people home.
Health & personal care stores had been holding up the Food & Drug sector earlier in the year, but that’s now changing. Their sales were up just 0.2% for the 3 months ending October.
After a sharp rebound in Q2, retail sales growth in the Store Merchandise sector has steadily dwindled. Nevertheless, sales were up 6.8% year-over-year for the 3 months ending October, which is still ahead of pre-pandemic performance. The underlying 12 month trend however is now also tapering off from record highs earlier in the year and is likely to slow further.
Almost all store types in the sector recorded significant positive retail sales growth for the 3 months ending October. Clothing & clothing accessories stores did especially well with a 14.9% year-over-year retail sales increase.
Only one retailer type suffered a loss. Electronics & appliance stores’ sales were down 5.0% year-over-year during the period.
Automotive & Related
Automotive & Related continues to be a tale of two retailer types. While sector sales did increase by a strong 7.7% year-over-year for the 3 months ending October, this was the net result of weak growth in retail sales at automobile dealers combined with high growth at gasoline stations.
New car dealers’ retail sales were up a mere 0.8% year-over-year for the 3 months ending October. There’s nothing to suggest that a turnaround is imminent.
Gasoline station retail sales however were up 28.3% in the period, which was strong enough to pull up the whole sector. This reflects the role of increasing pump prices, which buoyed up Automotive & Related, which then buoyed up overall total retail sales.
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
Canadian e-commerce retail sales really took off with COVID, and are now leveling off. After high double digit increases at the start of the 2021, sales were up just 1.5% year-over-year for the 3 months ending October.
Overall, e-commerce represented about 6.4% 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 October 2021, electronic shopping and mail-order houses had an estimated $26.8 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 September 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 $44.4 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 2.6% 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 60.3% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce was 39.7%.
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.