Seasonally-adjusted Canadian retail sales fell by a whopping 10 per cent in March to $47.1 billion. The largest drop since the data became available in 1991. About 40 per cent of retailers closed their stores mid-month due to the pandemic, while in the clothing sub-sector 91 per cent closed. Sales were down in 6 of 11 sub-sectors, representing 39 per cent of retail sales. Leading the drop were clothing stores (-51 per cent), auto dealers (-36 per cent), and gas stations (-20 per cent). In contrast, sales were up at grocery stores (23 per cent), health and personal care stores (5 per cent), and general merchandise stores (6 per cent).
The shutdown of physical stores caused many retailers to shift or expand their online presence. E-commerce sales were up by 40 per cent in March year-over-year at $2.2 billion, accounting for almost 5 per cent of total retail sales. This excludes Canadians purchasing from foreign e-commerce retailers.
Sales were down in all provinces, leading the decline were Ontario (-9 per cent), Quebec (-16 per cent), and Alberta (-13 per cent). In BC, seasonally-adjusted retail sales were down by 4.6 per cent at $7 billion in March. Looking at the non-seasonally adjusted change shows a different picture. Retail sales in March were up by 5.3 per cent from the previous month, notably at grocery stores (31 per cent), building and garden material stores (26 per cent), and at electronics and appliance stores (23 per cent). Compared to the same time last year, BC retail sales were down by 3 per cent.
Given that retailers were closed only starting mid-March, it is expected that the April decline will be higher. Advance estimates provided by Statistics Canada for April indicates retail sales declined by 15.6 per cent. As some provinces begin to re-open, we can expect retail sales to gradually return, but the magnitude will largely depend on consumer demand, which has been cautious in other countries that have started to re-open. Moreover, unemployed individuals and individuals who have had their working hours reduced will likely not be making non-essential purchases in the near future.
