• Canadian retail sales fell 10% in March (m/m), the largest decline since data became available in 1991. Statistics Canada also provided advanced estimates for April, with sales expected to decline a further 15.6% (this figure is subject to revision).
  • Netting out price changes retail trade volumes were down an unprecedented  8.2% on the month.
  • Sales were down in six of the 11 major sectors. The drop was largely driven by the motor vehicles and parts dealers (-35.6%) and gasoline stations (-19.8%) categories. For gasoline stations, most of the decline was due to prices, with the volume of sales dropping only 1.8%. Sales also dropped markedly across discretionary spending categories, including clothing and clothing accessories stores (-51.3%), furniture and home furnishing stores (-24.5%), and sporting goods and hobby stores (-23.8%).
  • As expected, some offset was provided by a surge in sales at food and beverage stores (+22.8%), health and personal care stores (+4.6%), and general merchandise stores (+6.4%).
  • Also as expected, retail e-commerce sales skyrocketed, rising 40.4% year-over-year.
  • Sales fell in all ten provinces. Ontario (-9%), Quebec (-15.7%), and Alberta (-13%) led the overall decline. Some provinces with lesser restrictions on retail stores at the time, such as B.C., saw relatively smaller declines (-4.6% in B.C.).

Key Implications

  • As expected, social distancing efforts and mandated closures in the face of COVID-19 drove the largest decline in retail sales on record. As bad as March was, Statistics Canada’s preview of April’s data confirms that the worst was yet to come.
  • With some provincial economies starting a gradual re-opening process for some retail stores, we expect some gradual normalization in sales from May onwards. Federal and provincial support programs, such as the Canada Emergency Response Benefit, should also help provide a backstop to the unprecedented loss in employment and income experienced by consumers.
  • However, we caution that consumer spending patterns will likely look a bit different over the foreseeable future. In a recent report, we highlighted that household savings rates are expected to rise in the face of elevated economic and labour market uncertainty, prompting consumer caution and substitution away from discretionary purchases.


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