- Canadian retail volumes rose 0.2% in February, 0.9% y/y
- 1/4 of retailers impacted by rail blockades and/or COVID-19
- RBC data shows sales fell sharply after mid-March
In one of the last few Canadian data releases that will still fit on our charts, retail sales reportedly edged slightly higher in February. That marked a fourth straight monthly gain but still left overall trends looking less than stellar in the pre-coronavirus era (sales volumes were up less than 1% from a year earlier, as has been the case since last May). While COVID-19 impacts aren’t clear in the headline reading, StatCan noted that 25% of retailers were impacted by the virus and/or rail blockades that disrupted the flow of goods in the month. Both caused transportation delays, while coronavirus concerns reduced customer traffic for some retailers. Not all retailers were negatively impacted with sporting goods, music and hobby, and building material stores seeing some sales boost.
Today’s data is a prelude to the March figures that will show a substantial decline in retail activity due to the mid-month closure of many non-essential retailers. RBC data indicates card spending fell sharply toward the end of last month. Again, not all sectors were equally impacted with spending on groceries, work-from-home goods, and at-home entertainment gaining at the expense of non-essentials and dining and entertainment outside the home. Online retailers will benefit as well. E-commerce sales were already up 18% year-over-year in February (this data misses out on purchases from foreign e-commerce retailers) and StatCan noted many retailers were expanding or opening online platforms in response to COVID-19 containment measures. While some sectors will be spared (or even increase) the bulk of retailers will see a dramatic pullback in sales with stores closed and shoppers strongly encouraged to stay home. The combination of EI and the new CERB program will provide a larger-than-usual income offset for the millions of workers losing their jobs, but there will still be a significant income loss for households that will limit the bounce-back in spending even as physical distancing measures begin to ease.
