Advertisement
Advertisement

Canadian Retail Sales Dip: Year-End Drop in Discretionary Spending [J.C. Williams Group Analysis]

Date:

Share post:

By J.C. Williams Group

2023 Canadian retail sales ended in a lackluster way, growing only 0.9% YOY for All Stores in December. Discretionary spending decreased in December, decreasing -1.0% YOY for All Stores Less Automotive, Food, and Pharmacies. The year-to-date sales grew in 2023 over 2022 to 2.1% and 0.4% respectively. The economic conditions in December were not ideal considering inflation remained high, and there were numerous layoffs announced at the end of the year.

Regardless of deep Boxing Day sales, consumers were sticking to their budgets. As mentioned last month, Black Friday and Cyber Monday both experienced record sales, with increases of 7.5% and 9.6% YOY respectively. This likely resulted in the majority of consumers completing their planned shopping before Boxing Day, and the needs and wants within their budget had already been acquired.

Image: Lastman’s Bad Boy

Discretionary spending overall took a big hit in December, with various categories decreasing over 2022, and others down throughout the entire year overall, including:

  • Furniture Stores were down -7.9% YOY and -6.8% YTD as the category struggled throughout 2023. This is likely still related to the COVID-era highs the category experienced while we were spending more time at home. Major players, such as GTA’s Lastman’s Bad Boy have even filed for bankruptcy.
  • Sporting Goods, Hobby, Book and Music Stores were also down -7.2% YOY and -1.7% YTD, as the category that stood strong through COVID also continues to fall. Warmer weather through the winter is partially to blame, as skiing, skating, etc. have all been much more difficult to do throughout 2023. According to Canadian Tire, this was a contributing factor to their disappointing Q4 results.
  • Beer, Wine, and Liquor Stores were down -7.1% YOY and -2.5% YTD as consumer preferences are clearly changing. This category, which is often popular for gifting, struggled as consumers attempt to lead healthier lifestyles and/or opt for options from Cannabis as an alternative vice. This will certainly be a category to watch over the next couple years, both because of lifestyle changes, but also since there are major changes coming to how the product is able to be sold in Ontario.
Bikes at Walmart Canada (Image: Dustin Fuhs)
Image: 2024 Canadian International AutoShow

Last month we discussed the increased revenues in Motor Vehicle and Parts Dealers, which continued to be up 5.2% YOY and 6.8% YTD. As the Canadian International AutoShow is currently on in Toronto at the time of writing this article, this category is top of mind. While the average price of a new vehicle in Canada remains high at $67,817, the AutoShow is reporting their third highest attendance in their 50-year history. The increased sales in this category may, however, be slightly misleading. With the average price of a new car rising almost 20% over 2022 in September 2023, this may be merely increased prices rather than increased demand. It may not be consumers shopping for new cars more frequently, but the prices being highly elevated.

2023 was a tumultuous year for retail sales in Canada. The exit of Nordstrom, the numerous layoffs/store closures, and inflation all made the market difficult to predict. 2024 has started similarly to how 2023 ended (in the US), but hopefully there are strong sales on the horizon. As we are now more than half way through the first quarter of 2024,  JCWG is thinking about:

  • Through 2023, JCWG felt like we were seeing/saying the same thing month after month (lower discretionary spend, increased inflation, etc.). Will we continue to experience this status quo through 2024?
  • What major shifts will we see in the retail industry in Canada if interest rates come down?
  • With people moving back to cities, and therefore increasing their costs of living in most cases, what effect will this have on discretionary spend? Will smaller towns/suburbs experience sales decreases as a result?
  • Retail leadership, according to a survey conducted by the Ebeltoft group, is not optimistic about 2024 sales projections. Have smaller retailers been preparing for this to the extent of larger players?
  • How have YOU prepared for the uncertainties that 2024 brings?

For support with your 2024 strategy in times of uncertainty, reach out to the strategy team at JCWG!

Thank you J.C. Williams Group for this report.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From Retail Insider

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

ZUCORA Appoints David COHN as Vice President of Sales

Zucora appoints David Cohn as Vice President of National Sales, expanding his role to lead sales strategy and strengthen partner growth across Canada.

Lululemon Signals Strong Holiday Quarter Amid Governance Turmoil

Lululemon expects fourth-quarter results at the high end of guidance as it faces leadership change and mounting pressure from activists.

Kits Eyecare appoints Angela MacInnis as chief marketing officer

MacInnis will join the executive leadership team and assume responsibility for the company’s marketing strategy and brand development.

MNP Consumer Debt Index: Canadians brace for challenging 2026 

A majority believe the economy overall will worsen (59%) this year, and as many expect housing affordability to deteriorate (59%).

Uniqlo Entering Winnipeg With Two-Store Launch

Uniqlo confirms its first Winnipeg store at CF Polo Park, with a second location planned at St. Vital Centre as the brand deepens its Canadian expansion.

Groupe Dynamite sees strong comparable sales growth

Groupe Dynamite is updating fiscal 2025 comparable store sales growth guidance to a range of 26.5% to 27.0%.

L.L.Bean promotes Greg Elder to president and CEO

The company runs 68 stores across 19 U.S. states, as well as 25 locations in Japan and 14 in Canada through a partnership with Jaytex Group.

Moxies to Close Yorkdale Restaurant After 18 Years

Moxies will close its Yorkdale Shopping Centre restaurant on January 18, 2026 as the brand looks ahead to its next phase of growth.

Restaurants Canada appoints Anthony Polci as executive vice-president of government relations and public affairs

The appointment took effect recently, according to the organization, and comes as Restaurants Canada continues to position its government relations and public affairs function as a core part of its work on behalf of the foodservice industry.

Empire launches Feed The Dream campaign tied to Milano Cortina 2026 Games

The company said that its Feed The Dream campaign will run across its Sobeys, IGA, Safeway, Foodland, Thrifty Foods, Farm Boy and Voilà brands, with programming designed to connect consumers, communities and athletes in the lead-up to and during the Games.

Aesop Opens Robson Street Store in Downtown Vancouver

Aesop has opened a new Robson Street store in downtown Vancouver, marking its fifth location in the city and second in the downtown core.

Toronto Gift + Home Market Returns as Canada’s Largest Spring Wholesale Trade Event

The Toronto Gift + Home Market returns January 25–29, 2026, bringing retailers and exhibitors together for Canada’s largest spring wholesale trade event.

SSENSE Co-Founders Set to Buy Back Luxury Retailer

SSENSE co-founders secure court approval to repurchase the luxury retailer following its CCAA restructuring process.

Google Expands AI Shopping With Walmart, Shopify, Wayfair

Google is expanding AI-powered shopping in Gemini through partnerships with Walmart, Shopify, and Wayfair, signaling a shift toward agent-led commerce.

From the Desk: Retail’s Strategic Moves and Shifting Consumer Landscapes in Early 2026

Canadian retail enters 2026 amid strategic recalibration, as brands balance flagship investment, store optimization, AI adoption, and shifting consumer demand.

Chip Wilson’s Board Picks Reveal Lululemon’s Deeper Problem

Chip Wilson’s board nominations highlight deeper strategic issues at Lululemon as the brand grapples with innovation, leadership, and direction.

VIDEO: Retail sector faces tough year as trade tensions, consumer caution shape 2026: Bruce Winder

One of the most significant developments in 2025 was the shutdown of Hudson’s Bay, which left large amounts of vacant retail space across the country.

Canada’s unemployment rate on the rise: Statistics Canada

There were 1.6 million people unemployed in December, an increase of 73,000 (+4.9%) in the month.

Aritzia reports Q3 Fiscal 2026 financial results, record net revenue

"We delivered record net revenue of $1.04 billion in the third quarter of Fiscal 2026, a 43% increase compared to last year. Comparable sales grew 34%, with exceptional growth in all channels and all geographies."

Moose Knuckles Refines Retail Strategy With Eaton Centre Move

Moose Knuckles relocates its CF Toronto Eaton Centre store as the Canadian brand sharpens its retail, product, and global growth strategy.