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Canadian Retail Sales Hit a High Note in Q2


 
Total Canadian retail sales were up 7.8% year-over-year in Q2 2017, according to the latest Statistics Canada unadjusted data. This is the highest calendar quarter increase in 7 years, since Q1 2010. The 3 month growth trend (orange line in the above chart) is up, and the underlying 12 month trend (green line) has also strengthened to a 6 year high.

The improved sales performance is coming from a broad variety of retailers, so it's not just auto dealers and gasoline stations. The following chart shows the picture for Store Retail (i.e., excluding automotive).


 
There is a clear strengthening in the 3 month retail sales growth trend (orange line), and the underlying 12 month trend (green line) has now taken a turn for the better.


Food & Drug


 
Retail sales in the Food & Drug sector increased 4.0% in Q2 on a year-over-year basis. While not record breaking by any means, it was still a significant improvement over the 1.6% annual gain recorded for the first quarter of 2017. Food & Drug now appears to have recovered from its poor start to the year.

Sales at food & beverage stores gained 3.0% in Q2, after going down 0.2% in Q1. Specialty food stores had a particularly strong Q1, with retail sales up 11.2% versus a year ago.

Health & personal care stores continue to do well. Their Q2 retail sales were up 6.7% year-over-year, a modest improvement over their 6.1% gain in Q1. Nevertheless, these results represent a "coming down to earth" after an annual increase of 13.8% last year.


Store Merchandise


 
Retail sales in the Store Merchandise sector gained a whopping 8.6% year-over-year in Q2 2017, the highest calendar quarter gain since Q3 2006. The 3 month trend (orange line in the above chart) has shot up in recent months, and the underlying 12 month trend (green line) is clearly headed upwards as well.

Almost all store types in this sector had strong sales increases in Q2, and none had a decline. Double digit Q2 gains were posted by jewellery, luggage & leather goods stores (up 18.6% year-over-year), electronics & appliance stores (up 14.5%), building material & garden equipment/supplies dealers (up 14.0%), and shoe stores (up 11.8%). Even general merchandise stores gained 7.3% in Q2, after eking out only a 0.1% gain in Q1.

Note that Statistics Canada is now suppressing the breakdown of general merchandise stores for confidentiality reasons. The figures in the table below are estimates based on previous trends.


Automotive & Related


 
The Automotive & Related sector continues to feature high but unsteady retail sales gains, depending on the fortunes of new car dealers and gasoline stations. In Q2 2017, sales were up 10.0% year-over-year, somewhat off the 11.7% gain in Q1.

New car dealers' retail sales were up 10.0% in Q2, which was an improvement over their 7.6% Q1 gain. Both figures are roughly in line with their 8.6% annual gain in 2016.

Gasoline station retail sales increased 10.4% year-over-year in Q2. This would normally be a sparkling result, except that it's well below the 22.5% gain posted for Q1.


By The Numbers



For definitions of store types, see Statistics Canada NAICS.


Canadian E-Commerce Stats

StatsCan started providing ecommerce retail sales data in January 2016. While the amount of data is limited, some trends appear to be emerging. Here are the results.


 
Overall, e-commerce represents about 2.4% of Canadian retail sales for the 12 months ending June 2017, including both pure play operators as well as the online efforts of brick & mortar stores. Canadian consumers however also buy online from foreign websites, spending which is not captured in these numbers.

Year-to-date results for 2017 (6 months) show that Canadian e-commerce sales are up 41.9% from a year ago, a much higher gain than for retail in general.

Note that location based retail is the same as that in the preceding large "By The Numbers" table. It's what's normally reported as Canadian retail sales. Except that it isn't. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which includes electronic shopping and mail-order houses, which is where (mostly) pure play e-commerce players are. For the 12 months ending June, electronic shopping and mail-order houses had an estimated $8.0 billion in e-commerce sales.

But that's not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending June, this group had an estimated $6.0 billion in e-commerce sales. With electronic shopping and mail-order houses, there's a grand total of $14.0 billion in e-commerce sales by Canadian operators over a 12 month period. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include purchases made by foreigners at Canadian e-commerce businesses.

For electronic shopping and mail-order houses, an estimated 82.5% of their sales are allocated to e-commerce. For the (mostly) bricks & mortar crowd, it can be estimated that just 1.1% of their total sales come from e-commerce.

In the final section of the above table, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generate an estimated 57.3% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers' share of e-commerce is 42.7%.

For more explanation on the e-commerce numbers, see Statistics Canada: Retail E-commerce in Canada.


Monthly Update Notification

This analysis is updated monthly as new numbers are published by Statistics Canada. If you would like notification of when an update becomes available (and you've read this far), please connect with Ed Strapagiel on LinkedIn.


23 August 2017