Stats Canada releases April retail sales numbers

This morning’s release of sales numbers were substantially worse than Stats Canada had predicted. These numbers underscore the real impact of the pandemic on the retail sector, especially for retailers in the discretionary spending categories.

• Retail sales were down by over one-quarter (-26.4%) in April to $34.7 billion and have fallen by one-third (-33.6%) since physical distancing measures were implemented in mid-March.  (Retail sales were predicted to decline by -15%).
• By way of comparison, in the United States retail sales fell  (-17.1%) in April 
  • The store closures across Canada were greater than in the United States with provinces dictating closures and consumers being asked to stay home and only shop for essentials (in store). Most Canadian retailers did not offer in-store shopping in April.
• Clothing and clothing accessories (-84.8%), sporting goods, hobby, book and music (-66.7%) and motor vehicle and parts dealers (-64.2%) stores reported the largest percentage declines from February to April.
• Regional declines rates varied.
  • The largest declines occurred in Ontario and Quebec—the provinces reporting the most COVID-19 cases in April.
  • Retail sales were down by almost one-third (-32.8%) in Ontario, following a 8.5% decrease in March. Sales in the census metropolitan area (CMA) of Toronto were down 35.6%.
  • Sales decreased by(-27.8%) in Quebec, led by the CMA of Montréal (-31.3%).
  • In British Columbia, sales were down by one-fifth (-20.7%) following a 3.7% decline in March. Sales in the CMA of Vancouver were down 23.9%.
  • More regional Stat Canada breakdown. 

• Sales were down in all 11 subsectors in April.
  • A few sectors (e.g. grocery, cannabis, office electronics/furniture, other consumables) held up well or saw growth (especially essential retailers) as dramatic changes in buying patterns and the lives of Canadians were most pronounced in the month of April, the first full month of quarantine lockdown
  • Retailers of apparel and other formats that were shopping mall based simply could not make up for the loss of access to their stores with the incredible growth of their eCommerce.  
• Small to mid size retailers with no or small eCommerce businesses suffered the most and that struggle may also be reflected in the May numbers.
• eCommerce, reported at 9% of retail, is under-reported, but the trend is unmistakable – massive shift in shopping pattern.  
  • The number probably looks closer to 15% of core retail as Statistics Canada does not include sales from Amazon or Wayfair for example – as they have no store presence in Canada – they are considered warehouses thus their sales numbers are not reflected in the 9% (thus our estimate of 15% if all is included)

As stores begin to re-open across the country RCC will be watching these numbers carefully for which consumer behaviours “stick” and how RCC, governments and other stakeholders can best support one of the most important industries and largest private sector employer in the nation.