Which categories were hit hardest at the start of the pandemic?

Ed Strapagiel's analysis shows clothing and auto are facing the toughest road to recovery.

Discount-clothing

While only half of March was affected by COVID-linked closures, Canadian retail sales still declined 10.9% year over year, according to the latest insights into Statistics Canada data by retail analyst Ed Strapagiel.

And as part of the doomsday forecast, Strapagiel says “this is the sort of result, or worse, that we can expect in the April numbers when they are released.”

According to his insights, the automotive sector “looks like it has just driven off a cliff,” with sales off 30.2% in March, and down 8.5% for Q1. New car dealers saw their sales decline 35.0% in March due to closed dealerships and people not wanting to take on additional financial risk. On a related front, in March, gas station sales were down 23.3% year-over-year as fuel prices plummeted.

Sales in the store merchandise sector were down 10.4% in March, with sales of high-ticket items in the furniture and home furnishings category sinking 26.2%. With travel restrictions in place and fewer occasions to attend, jewellery, luggage and leather goods were driven down by 26.2% in March, falling to 11.5% for the year to date. But clothing and accessories stores were hit the hardest, with sales down a whopping 54.1% in March versus last year and now down 19.0% for the year to date, due in large part to mall footprint dependency.

General merchandisers bucked the trend somewhat, with retail sales gaining 6.2% in March, largely due to the inclusion of multi-purpose retailers like Walmart and Costco, which have food and grocery selections and more developed ecommerce capabilities.

On the positive side of the ledger, retail sales in the food and drug sector are now up 8.8% year-over-year for the first quarter, spiking 14.6% in March alone. Supermarkets and other grocery stores were out in front, with retail sales increasing 22.1% year-over-year in March and gaining a record 12.6% for Q1 2020 overall – due to pantry-stocking behaviour and consumers turning to larger grocery retailers as sources of products they might otherwise get from other, closed retailers, both trends that are expected to cool off heading into mid-year. Specialty food and beer and wine moved higher, 11.6% and 10.4%, respectively, in March.

One trend that is expected to continue is a rise in ecommerce sales as customers become more accustomed to shopping online. In March 2020 alone, e-commerce sales gained a huge 40.4% over a year ago, up 23.8% year-over-year in Q1 2020. This was far better than for location-based retail, which lost 0.7%.