A poor showing by electronic and appliance stores is setting the tone for doom and gloom in the latest retail report from Stats Canada.
According to consultant Ed Strapagiel, for the three months ending August 2019, retail sales in Canada gained a mere 1.0% year-over-year on a not seasonally adjusted basis. At current rates, the analyst says, retail sales growth in 2019 could end up at around 1.3% or 1.4%, which would make it the worst year since 2009’s so-called Great Recession.
Retail sales for electronics and appliance stores is partly to blame for the sluggish retail growth, with sales sliding 10.2% in the last three months. Convenience stores took their lumps too, down 6.7%, followed by gas stations at 5.2%. Automated and related sales, shoe stores, and sporting goods, hobby and bookstores, round out the laggards.
Thanks to cannabis, miscellaneous retailers led with year-over-year gains of 11.8%. And according to the latest figures, general merchandise stores also had a healthy retail sales increase of 5.2% for the period, followed by department and furniture stores.
Regional disparities come into play too, with Saskatchewan leading the retail sales decline for the last three months, reporting a 2.6% decrease, followed by Metro Vancouver with a 1.1% drop, and Newfoundland and Labrador with a 0.7% decline in sales. Meanwhile, PEI, Nova Scotia and the greater Montreal region are heading in the opposite direction, growing at 3.3, 3.2% and 3%.
The food and drug sector’s retail sales growth led the market for most of the first half of 2019. That has now evaporated, Strapagiel says, with sales up only 1.2% for the 3 months ending August. This has now replaced July as the second worst such gain in the last six years.
Health and personal care stores did somewhat better, gaining 2.4% in retail sales for the three months ending August 2019, Strapagiel reports. The sector’s year-to-date retail sales are up 2.6% after eight months, which puts health and personal care stores on track to record slightly higher growth in 2019 than a year ago.
Of note, Canadian e-commerce sales were up 29.9% year-over-year for the three months ending August 2019.
Still, Strapagiel’s report says that e-commerce represents a mere 3.3% of total Canadian retail sales for the 12 months ending August 2019, a figure that includes pure play online retailers as well as online operations of bricks and mortar stores. A caveat, however: Canadian consumers also buy online from foreign sites not captured in these numbers, he says.