Canadian retail sales slumped in March with All Stores declining -1.7% YOY, with discretionary categories (All Stores Less Automotive, Food, and Pharmacies) down -2.5% YOY. March experienced two fewer shopping days (Good Friday and Easter Monday) in 2024 compared to 2023, but this is only a small factor as high levels of inflation continue.
Retail in general is seeing fluctuating footfall in Canada. Shopping centres are down approximately -6.3%, whereas BIAs are up by 10.9% at the end of March 2024, as compared to 2023. While this does not immediately correlate to sales, this is a telling factor that can predict the prevalence of browsing and potential future purchases.
Grocery prices and the associated large grocers were top of mind in March, and remain top of mind at the time of writing. Grocery prices are up over 20% compared to this time in 2021 and consumers have responded in multiple ways, including moving to lower cost options and full boycotts. A partial result of these changes in consumer behaviour have resulted in continued increased revenue for Specialty Food Stores.
- In March, the category’s revenue is up 10.3% YOY. January and February also saw increased revenues, up 6.6% YOY and 14.4% YOY respectively.
- Canadians are more willing to shop with small grocery stores. In a study by Wagepoint, findings included: 58% of consumers are willing to pay more for items/services in order to support a local grocery store, with 78% wishing they could do some or all of their shopping at a small business. A large barrier for consumers is access. There are insufficient small grocery options in their area, or they are not aware of them.
Building Material and Garden Equipment stores were down -4.7% YOY in March, echoing what we are hearing from the industry. Both Lowes and Home Depot both reported decreased sales in Q1 2024, which had been predicted; Lowes was down -4.4% YOY and Home Depot -2.3% YOY.
- Lowes, specifically, experienced decreases in both average transaction size as well as number of transactions. Overall, these decreases are as a result of fewer discretionary sales (patio furniture, barbecues, etc.), as well as decreases in consumers taking on large scale projects, such as remodels.
- Home Depot, whose sales were also down, may not have had such a large decrease as a result of a higher contractor sales percentage. Contractors make up around 20-25% of Lowe’s sales, where as they make up about half of Home Depot’s.
With summer fully underway at the time of writing, and with the announcement of indefinite boycotts, JCWG is thinking about:
- When will boycotts against large grocery chains end? Will there be a noticeable impact on sales?
- What categories will be the most affected as a result of upcoming mortgage renewals?
- Will shopping centres start to gain further traffic throughout the summer and into the fall? Are BIAs going to continue to outpace them?
- How are YOU preparing summer 2024?
Thank you J.C. Williams Group for this report.
No plans for a store in Quebec? Instead of a choice between the poor quality of low-priced stores and the useless, flashy designer brands being planned for Royalmount, we need more mid-range stores like this, selling quality at a reasonable price – yes, it’s reasonable for what you get. For now, it’s just another store to add to the long list of ones to shop at on the next trip to Ontario, or the U.S.