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Canadian Retail Sales Firm Up


(If you prefer to go straight to the e-commerce section, you can click here: New Canadian E-Commerce Stats.)



 
Although it's hardly a recovery, Canadian retail sales do appear to have stabilized in recent months, according to the latest Statistics Canada data. After significant improvement at the start of 2016, growth rates quickly fell off in Q2. The good news is that this trend did not continue, and retail has been scratching and clawing its way back since.

For the 3 months ending July 2016, year-over-year sales growth was just 1.8%, but for the 3 months ending November this improved to 3.3%. Note that all figures are on a not seasonally adjusted basis.

The 3 month trend (orange line in the above chart) has now caught up to the underlying 12 month trend (green line). In general, things are "good but not great".


Food & Drug


 
Retail sales growth in the Food & Drug sector nudged up in November after nudging down the month before. For the 3 months ending November 2016, retail sales were up 2.3% year-over-year, somewhat off the previous year-to-date pace.

The results in Food & Drug reflect the different fortunes of the sector's two main players. Health and personal care stores' retail sales were up 6.0% for the 3 months ending November, but this was largely offset by just a 0.4% gain at supermarkets and other grocery stores.


Store Merchandise


 
Store Merchandise retail sales were up a relatively strong 4.4% year-over-year for the 3 months ending November. This was almost double the result for the Food & Drug sector, and roughly 50% higher than for Automotive & Related.

Some retailer types had better than average sales growth on a 3 month basis, including shoe stores (up 8.9% year-over-year), building material & garden equipment & supplies dealers (up 8.1%), and furniture stores (up 5.4%). On the other hand, there were no disaster areas and only one weak spot, with home furnishings stores retail sales down 0.2% year-over-year.

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


 
Retail sales in the Automotive & Related sector were up 3.1% year-over-year for the 3 months ending November. After weak growth in Q3, the situation now appears to be improving. The underlying drivers however are changing.

Automobile dealers' sales growth has slowed considerably over the course of 2016, from 15.2% year-over-year in Q1 to 4.1% for the 3 months ending November. On the other hand, gasoline stations' sales were up 1.2% for the 3 months ending November – which may not sound like much, but it's the first such increase in 2 years.


By The Numbers



For definitions of store types, see Statistics Canada NAICS.


New Canadian E-Commerce Stats

StatsCan is now providing new data on ecommerce retail sales. There is not enough information yet to consider trends or even growth rates, but we can add up the figures to at least get some sense of size and share. Here are the results.


 
Overall, e-commerce represents 2.2% of Canadian retail sales in the first 11 months of 2016. That may seem small, but it likely understates online's influence on overall retail sales.

In November, e-commerce spiked to 3.0% of retail, the highest month thus far in 2016. This appears to reflect the role of Black Friday and Cyber Monday, which have now more or less fused together as "Black Friday Week", which in turn can last more than one week).

First, one has to get a handle on just what these measures are. Location based retail is the same as that in the preceding large "By The Numbers" table. It's what is normally taken and reported as Canadian retail sales. Except that it isn't. Location based retail does not include 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 first 11 months of 2016, electronic shopping and mail-order houses had an estimated $6.65 billion in e-commerce sales.

But that's not the only source of e-commerce retail sales, because (mostly) bricks & mortar location-based retailers also sell online. For the first 11 months of 2016, this group had an estimated $4.04 billion in e-commerce sales. Added to electronic shopping and mail-order houses gives a grand total of $10.69 billion in e-commerce sales by Canadian operators for the first 11 months of 2016. 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 calculated that just 0.8% of their total sales come from e-commerce.

In the final section of the above table, it is seen that (mostly) pure play operators (namely, electronic shopping and mail-order houses) generated 62.2% of all e-commerce sales in Canada in the first 11 months of 2016. The (mostly) bricks & mortar location-based retailers' share of e-commerce was 37.8%.


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.


22 January 2017