Retail has been very much in the forefront of the news in the context of the COVID-19 pandemic, impacted by government-imposed restrictions which have most Canadians working and sheltering at home. The release of Canada’s March retail sales survey data from Statistics Canada on Friday, has finally quantified the magnitude of the impact: it plunged a staggering 10% from the previous year. While many stocked up on food and cleaning products, other categories saw steep, double-digit declines from a year ago as retailers cut back hours and limited traffic.
We asked Patricia Baker, Director, Retailing, at Scotiabank Global Equity Research, to examine the available retail data thus far and break down how shopping has shifted in the wake of the pandemic.
"This marks the largest drop on record, with six of eleven subcategories in decline, and is larger than the 7.1% decline in March retail sales seen in the US. March saw record declines in Canada at motor vehicle and parts dealers (-35.6%), clothing stores (-51.3%), gasoline stations (-19.8%) and furniture stores (-24.5%). However, there were strong trends in the food and beverage sector as consumers rushed to stockpile, driving the largest monthly gain in the category at 22.8%. Many retailers moved fast to bolster their online capabilities at the outset of the pandemic, and Canadians engaged heavily in e-commerce, with these sales rising 40.4% year-over-year.
- Read Scotiabank Economics' report on the latest StatCan retail data here.
"We expect the pandemic has delivered a powerful catalyst for online sales in this country and almost overnight driving penetration rates previously anticipated several years out. StatCan on Friday provided a preliminary view on April retail sales, suggesting an even steeper decline of 15.6%. But we hold a view that the food and beverage sector is likely to continue to see much higher than normal sales trends, albeit far from the mid March peaks."
- Listen to the Scotiabank Market Points podcast on how shopping has changed here.
Here's a look at how weekly sales of flour, rice, household cleaners, masks and gloves, toilet paper and alcohol in Canada have changed from a year ago, based on an earlier report released by StatCan on May 11.
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