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

FreshCo Expands East with First Atlantic Canada Locations

FreshCo enters Atlantic Canada with new Halifax-area stores, marking Empire’s first discount grocery expansion into the East Coast.

Righteous Gelato enters $900M frozen novelty category with national Sorbetto Bar launch across premium Canadian grocers

Having strong national distribution with partners like Loblaws, Sobeys, Metro, and Whole Foods allows it to scale quickly and ensure consumers can actually find the product when they’re excited to try it.

Pet Valu celebrating 50 years in business

The brand recently opened its 870th store in Canada. 

RUDSAK Expands into Europe and Asia Markets

RUDSAK expands into Europe and Asia through premium wholesale partnerships as the Montreal brand advances its global growth strategy.

Cake Beauty expands retail footprint in Canada with Walmart and Shoppers Drug Mart rollout

Cake started in 2003 out of the kitchen of the founder Heather Reier, who wanted to create some products that were “delicious, indulgent, but also clean.”

Angels Wear Preloved Launches Canada’s Largest Resale Event

Angels Wear Preloved launches Canada’s largest luxury resale event in Toronto, bringing 40+ consignment vendors together for one day.

Daily Synopsis: Apr 9, 2026

Roots reports financials, Ikea expanding, Empire acquires Quebec grocer, T&T Supermarket head discusses expansion, Costco opening in Thunder Bay, Indigenous-owned 'department store' shutting down, an dother news.

IKEA to Open London Store in Former Hudson’s Bay Space

IKEA will open a 43,000 sq. ft. store in London, Ontario, taking over former Hudson’s Bay space at White Oaks Mall.

Empire Acquires Mayrand, Enters Quebec Discount Grocery Market

Empire acquires Mayrand, gaining entry into Quebec’s discount and warehouse grocery market through a court-supervised sale process.

Reitmans unveils “bold new era” for Canadian fashion

In late April, Reitmans said it will unveil a new retail concept at Carrefour Laval, located approximately 20 kilometres from Montreal's downtown core.

Roots reports strong Q4 and Fiscal 2025 results

Sales in Fiscal 2025 were $277.7 million, a 5.6% increase compared to $262.9 million in F2024

Happy Belly Accelerates Expansion as U.S. Entry Nears

Happy Belly ramps up Canadian expansion and prepares for U.S. entry as profitability improves and new restaurant concepts gain traction.

MINISO Hello Kitty Pop-Up to Debut at Scarborough Town Centre

MINISO is launching Canada’s first Hello Kitty pop-up at Scarborough Town Centre, highlighting its IP-driven retail strategy.

Must Société opens flagship Jardin de Ville store in Laval (Photos)

Must Société is a leader in mid- to high-end indoor and outdoor furniture, with 16 stores across Québec and Ontario.

Gen Z Canadians reviving mall culture with focus on social shopping: Lightspeed Commerce

83% of Gen Z Canadians say stores with social or community features make them feel more connected, and more than half (52%) have chosen a retailer specifically for its third-space experience.

Vessi focuses on measured retail expansion as demand grows for in-person shopping

The business now operates four stores following a U.S. launch earlier this year, with plans to continue expanding in Canada while refining its in-store experience.

Daily Synopsis: Apr 8, 2026

Canadian Tire’s new Hudson’s Bay summer line, shoplifting increases, class action targets bogus maple syrup producer, Peavey Mart store relaunch, Horses Atelier shutting after 14 years, and other news.

This Is J Advances Sustainable Growth in Canadian Apparel

This Is J highlights sustainable Canadian apparel growth through local production, community input, and its zero waste sample sale initiative.

Maison Territo Named Official Address for Montréal Design Week 2026

Maison Territo — home to Fendi Casa, Dolce & Gabbana Casa, Versace Home, and Bentley Home — is an official address for Montréal Design Week 2026. Visit the Royalmount showroom April 28–May 7.

Canadian Tire Launches Hudson’s Bay Stripes Summer Line

Canadian Tire unveils a new Hudson’s Bay Stripes summer collection launching May 1, expanding its strategy following the brand’s 2025 acquisition.