Retail Council of Canada (RCC) notes with cautious optimism that the June retail numbers reported today by Statistics Canada provide continued hope that consumers are returning to retail stores.
The month-over-month increase of 23.7% isn’t surprising but welcomed news especially in parts of the country where brick-and-mortar stores and malls were closed for several months.
- Retail sales up 3.8% year-over-year (June 2020 vs June 2019) and 23.7% month-over-month (June 2020 vs May 2020);
- Retail sales in June were 1.3% higher than February levels (pre-COVID);
- Retail sales were down 13.3% for the second quarter of 2020, compared with the first quarter of the year (as a result of many stores mandated to remain closed during the pandemic); and
- Non-essential retailer sales increased dramatically in June compared to May (e.g.: clothing and clothing accessories stores posted a 142.3% gain). While still below February 2020 sales levels, this indicates that consumers are shopping again for discretionary items.
Also, not surprising is that eCommerce demand edged off with the opening of stores. Today’s report shows that eCommerce was 5.4% of total retail sales in June compared to 8% in May (it should be noted that these percentages do not include such eCommerce sellers as Amazon or Wayfair). RCC believes that this shouldn’t be interpreted as a reversal, but rather as the result of more physical stores being open. We expect Canadians will continue to shop online during the COVID era and well beyond. RCC estimates that online sales represent approximately 15% of all retail sales in Canada (excluding auto and gas).
Non-essential retailer sales increased dramatically in June compared to May, although not all retail formats are rebounding equally. There is continued strength in home improvement, outdoor entertainment, and commodities for the home as Canadians adjust to their new lives. From the essential side, grocery sales are still benefitting from the transference of food demand from restaurants to in-home cooking. RCC expects these trends to continue with more Canadians working from home throughout the remainder of the year and beyond.
Looking ahead, there are several challenges that will test retailers. RCC will be releasing survey results on Monday, August 24, 2020 on Back to School shopping – an important consumer spending period. As well, other upcoming holidays such as Black Friday and Cyber Monday will be impacted by other challenges such as store capacity limitations and delays with home deliveries – both of which will require consumer patience and retailer innovation.
For more information or to schedule media interviews, contact:
Michelle Wasylyshen at [email protected]
About Retail Council of Canada
Retail is Canada’s largest employer with 2.1 million Canadians working in our industry. The sector annually generates over $76 billion in wages and employee benefits. Core retail sales (excluding vehicles and gasoline) were $377 billion in 2017. Retail Council of Canada (RCC) members represent more than two thirds of retail sales in the country. RCC is a not-for-profit, industry-funded association that represents small, medium and large retail businesses in every community across the country. As the Voice of Retail™ in Canada, we proudly represent more than 45,000 storefronts in all retail formats, including department, grocery, specialty, discount, independent retailers and online merchants. www.RetailCouncil.org