How good or how bad things are in Canadian retail depends on what you’re selling. At the total level, sales were up 8.5% year-over-year for the 3 months ending January 2022, a significant improvement over pre-pandemic growth trends. But this result is an overall average which doesn’t well describe any one retail sector or store type.
Another matter is that total Canadian retail sales are being shored up by unusually high gains in the Automotive & Related sector, mostly thanks to rapidly increasing gas prices. For Store Retail (Food & Drug plus Store Merchandise, excluding Automotive), the picture is more subdued.
In this case, sales were up a more modest 5.6% for the 3 months ending January 2022, and the underlying 12 month trend (green line in the chart) has been softening for about the last 9 months.
Food & Drug
The Food & Drug sector spent most of last year suffering from slowing sales growth, and this trend appears to be continuing. For the 3 months ending January 2022, retail sales were actually down 1.1% year-over-year. The underlying 12 month growth trend barely kept its head above water with a gain of just 0.3%.
Grocery stores are the largest subgroup in this sector, and their last 3 months retail sales declined 2.4% year-over-year in January 2022 despite high food price inflation. Convenience stores however suffered the most, with sales down 10.5% during the period.
Health & personal care stores had put up some good numbers in 2021, but now the bloom seems to be off this rose too. Their retail sales were up just 0.5% for the 3 months ending January 2022.
In sharp contrast to Food & Drug, the Store Merchandise sector appears to be doing quite well. Retail sales were up 11.4% year-over-year for the 3 months ending January 2022. The underlying 12 month trend gained 14.1%, a 5-year record high. Of course, much of this may be a rebound from the year before when sales were depressed by COVID.
A number of store types in this sector are enjoying significant sales increases. Clothing & clothing accessories stores’ retail sales were up a scorching 33.4% for the 3 months ending January 2022, while general merchandise stores gained 12.5%. Only electronics & appliance stores had a decline, with sales down 4.5% during the period.
Automotive & Related
The Automotive & Related sector had the highest year-over-year retail sales gain for the 3 months ending January 2022 at 15.2%. This was as a result of a strong gain in vehicle sales coupled with a huge increase in gasoline station sales.
New car dealers’ sales gained 8.5% during the period, an improvement over recent performance. There are supply issues so it’s difficult to know how long this will last. The big winner in vehicles however is used car dealers, whose sales increased by 16.4% for the 3 months ending January 2022.
Gasoline station sales have been rapidly increasing since the spring of 2021, usually by moderately high double-digits. Their sales were up 34.7% year-over-year for the 3 months ending January 2022. This is due to the runaway price of gas, as anyone filling their tank recently may have noticed.
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 made huge gains during the height of the COVID epidemic. Many consumers went online and stayed away from stores (and each other). This has now stalled with recent sales gain hovering around the 0% mark. For the 3 months ending January 2022, sales actually declined 7.3%.
Overall, e-commerce represented about 6.2% of retail sales over the past 12 months, according to Statistics Canada, 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. For the 12 months ending anuary 2022, 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. This group had an estimated $16.7 billion in e-commerce sales during the period. With electronic shopping and mail-order houses, there’s a grand total of $43.5 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 2.5% 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 61.6% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce was 38.4%.
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.