Canadian retail sales grew marginally in July 2023 with All Stores up 0.5% YOY and All stores Less Automotive, Food, Pharmacies down -0.6% YOY. Considering June suffered a decrease in sales, and factors such as the port workers strike causing around $10 billion in lost trade, this is a welcome change.
The greater category of health and wellness continues to impress through 2023 with no end in sight. There are many categories, both negatively and positively, affected by this trend, namely:
- Health and Personal Care stores are up 5.9% YOY, continuing on a trend of positive growth with YTD in 2023 being up 9%.
- Beer Wine and Liquor Stores are down -5.0% YOY as consumers opt for healthier options such as non-alcoholic cocktails.
- Cannabis Retailers continue on an upward trajectory of 13.6% YOY as non-inhalant varieties are seen as a much better alternative than alcohol.
- Electronics and Appliances Stores, up 10.1% YOY, could be a result of more customers seeking wearables as they exercise more through the summer. Wearables grew 8.5% in Q2 of 2023.
Going against the inflation-related reduction in discretionary spending, Shoe Stores sales were up 10.1% YOY and nearly 17% YTD. With other non-essential categories feeling the impacts of the current day, the fact that shoes are still selling is impressive. Certain brands such as Crocs have continued on their pandemic high, with sales still up over 200% compared to pre-pandemic. Another brand to keep an eye on in the coming months will be Birkenstock, who recorded a 31% annual growth rate from 2020-2022 and is preparing for an IPO. There may also be a linkage to health and wellness, as consumers are purchasing more shoes for running, basketball, tennis, etc..
Ecommerce sales were up significantly YOY, experiencing a growth of 10.8%, and YTD up 5.9%. With 2023 seeing increased traffic at brick-and-mortar retail locations, this performance is even more impressive. A large piece of this increased revenue is likely thanks to Amazon’s summer prime day which took place July 11-12, 2023. Total sales for Prime Day (i.e., not just in Canada) totalled $12.7 billion over the two days, an increase of 6.1% over 2022. The category that experienced the highest growth was Appliances, up 52% over 2022, with the top selling product overall being the Fire TV Stick with Alexa Voice Remote.
It is again the time of year where we begin to start thinking about holiday 2023. RCC and Leger have released their pre-season survey results for holiday, raising questions at JCWG:
- Considering that November is the most popular time to start shopping in 2023, how early will Black Friday sales begin to get ahead of competition?
- Which retail categories will be out of reach for Canadians for holiday 2023?
- Non-holiday related, will there be a significant decrease in grocery sales in August’s report as a result of the Metro strike?
- How are YOU planning your promotions and pricing in preparation for an overall lower holiday spend?
For support with your holiday strategy , reach out to the trusted experience at JCWG!