Retailers continuing to struggle to emerge from COVID-19 impact on sales

Last Friday, Statistics Canada released July retail figures. Retail Council of Canada issued a statement noting that after a big leap in June, the 1.2% month-over-month decline in core retail in many categories within the retail sector are still strained and struggling to survive the COVID-19 pandemic.

The July numbers suggest that the retail recovery is slowing. However, individual retail formats continue to rebound at varying paces. The decline in sales at food and beverage stores was expected as more restaurants reopened in July. That expectation was also true of general merchandise stores as other more specialized stores have reopened in competition with them. Areas that had been particularly hard hit like apparel and jewellery, luggage and leather goods, saw higher growth but from dismal levels earlier in the crisis. Conversely, areas that had done well during the early stages of reopening fell back somewhat, notably building materials, garden supplies, sporting goods, hobby, book and music stores. In a sense, these were staggered reopenings of consumers’ wallets, with the latter categories getting an earlier boost and the apparel and accessories categories being the last to move.

In considering retail’s recovery, it is also important to consider not just sales vs last year’s levels but also the massive cumulative hit that retail took between mid-March and the end of July 2020. To provide context, RCC has prepared an analysis using StatCan information which charts cumulative core retail sales between March and July 2020 vs the same period year ago.

Out of core retail, apparel and accessories (down $6.6 billion) and furniture/home furnishings (down $1.8 billion) are the ones who have been negatively impacted the most in aggregate. The sporting goods, hobby, book and music store category is the third most heavily affected (down $695 million). It is a smaller category but even proportionately is only down by half of what furniture has lost and a quarter of what apparel has lost.

Cumulative Core Retail Sales – March to July 2019

(x1000)	Mar-19	Apr-19	May-19	Jun-19	Jul-19	Total Mar-Jul 2019
Retail trade	$51,538,062	$51,212,247	$51,203,886	$51,028,664	$51,488,286	$256,471,145
Motor vehicle and parts dealers	$13,948,939	$13,784,312	$13,949,872	$13,442,697	$13,843,143	$68,968,963
Furniture and home furnishings stores	$1,594,606	$1,587,370	$1,608,952	$1,591,522	$1,597,359	$7,979,809
Electronics and appliance stores	$1,157,375	$1,153,196	$1,180,618	$1,171,441	$1,162,311	$5,824,941
Building material and garden equipment and supplies dealers	$3,219,569	$3,116,351	$3,150,049	$3,333,319	$3,241,184	$16,060,472
Food and beverage stores	$10,762,794	$10,820,865	$10,618,557	$10,721,962	$10,818,855	$53,743,033
Health and personal care stores	$4,033,787	$4,014,247	$4,029,851	$3,973,493	$4,067,153	$20,118,531
Gasoline stations	$5,416,897	$5,401,417	$5,454,819	$5,255,798	$5,337,216	$26,866,147
Clothing and clothing accessories stores	$2,995,445	$2,916,530	$2,878,543	$2,991,436	$2,926,508	$14,708,462
Sporting goods, hobby, book and music stores	$1,015,755	$1,041,023	$1,016,344	$1,030,501	$1,023,168	$5,126,791
General merchandise stores	$6,008,208	$6,002,053	$5,920,174	$6,093,421	$6,032,006	$30,055,862
Miscellaneous store retailers	$1,384,688	$1,374,883	$1,396,107	$1,423,074	$1,439,384	$7,018,136

Cumulative Core Retail Sales – March to July 2020

(x1000)	Mar-20	Apr-20	May-20	Jun-20	Jul-20	Total Mar-Jul 2020	Variance
Retail trade	$47,028,013	$35,352,146	$42,847,689	$52,559,116	$52,859,087	$230,646,051	-$25,825,094
Motor vehicle and parts dealers	$8,948,590	$5,137,677	$9,099,469	$13,571,876	$14,024,376	$50,781,988	-$18,186,975
Furniture and home furnishings stores	$1,173,554	$599,159	$954,288	$1,612,816	$1,692,654	$6,032,471	-$1,947,338
Electronics and appliance stores	$1,146,854	$1,013,942	$1,164,921	$1,226,628	$1,234,337	$5,786,682	-$38,259
Building material and garden equipment and supplies dealers	$3,349,374	$2,790,472	$3,156,931	$3,839,906	$3,394,323	$16,531,006	$470,534
Food and beverage stores	$13,503,589	$12,117,977	$11,803,499	$11,977,760	$11,729,954	$61,132,779	$7,389,746
Health and personal care stores	$4,293,172	$3,568,976	$3,741,120	$4,203,189	$4,201,486	$20,007,943	-$110,588
Gasoline stations	$4,326,872	$2,784,003	$3,343,120	$4,301,650	$4,564,109	$19,319,754	-$7,546,393
Clothing and clothing accessories stores	$1,465,146	$482,964	$963,490	$2,290,942	$2,548,125	$7,750,667	-$6,957,795
Sporting goods, hobby, book and music stores	$817,657	$379,166	$771,921	$1,250,408	$1,140,057	$4,359,209	-$767,582
General merchandise stores	$6,531,334	$5,422,621	$6,533,778	$6,737,022	$6,710,042	$31,934,797	$1,878,935
Miscellaneous store retailers	$1,471,872	$1,055,189	$1,315,152	$1,546,919	$1,619,624	$7,008,756	-$9,380