The store merchandise sector is starting to recover from its spring collapse, though it still has a bit more ground to make up.

That is according to the latest retail insights from Stats Canada analyst Ed Strapagiel.

After posting a 12.4% year-over-year decline in Q2 of 2020, retail sales in the store merchandise sector were up 7.1% in Q3, showing positive three-month momentum for the period ending in September. The underlying 12 month trend (the green line, see graph below) is crawling its way back up too. For the year-to-date, sales growth is now down by only 1.9%.

According to the latest Q3 figures, many retail categories within the sector fared better than previous quarters, including general merchandise, building material and garden equipment and supplies dealers, electronics and appliance stores, and also the miscellaneous stores group, which includes cannabis retailers.

Clothing and clothing accessories are the one category absent from that list, with sales down 13.4% in Q3, although that’s much better than the 58.4% Q2 plummet. Among the sub-category laggards are shoes (-9.2%) and jewelry luggage and leather goods (-1.8%).

Across sectors, retail sales were up 4.6% in Q3, but remain down 3.9% for the year-to-date.

Automobile dealers’ sales were up 3.2% in Q3, a vast improvement over a 35.7% decline in Q2. In September alone, their sales were up 10.1%, their best month in 2020 so far, with used car sales at 9.7% growth and new car dealers at 2.7%. Gas stations retail sales are still a sector anchor, falling 14.1% because of decreased demand and prices.

Food and drug stores continue to show strength, with supermarkets and other grocery stores leading the charge, as per usual. Their sales gained 10.0% in Q3 and are up 11.5% year-to-date after nine months, according to Strapagiel’s analysis. Convenience stores and beer, wine and liquor outlets also reported strong retail sales gains in Q3.

Strapagiel reports that ecommerce cooling off trends could be misleading: the 3 month trend was up nearly 70% in Q3 while the 12 month growth trend more than doubled over the last year. Overall, however, e-commerce still only represented about 5.2% of Canadian retail sales for the 12 months ending September, including both pure-play as well as ecommerce sites for bricks-and-mortar stores.

Regionally, the Territories and Manitoba are leading the Q3 recovery (11.4% and 9.4%, respectively) while the GTA is bringing up the rear, with tepid growth of only 0.1%.