For the month of February, rail blockades and the onset of COVID-19 in Canada affected total seasonally adjusted retail sales by a negligible amount. The push for social distancing, self-isolation and—in some cases—quarantine were only being considered at the time, unlike the current situation where these measures are placing new and evolving pressures on consumers, retailers, producers and their supply chains. 

 

Retail sales rose for the fourth consecutive month, up 0.3% to $52.2 billion in February. This marked the first time retail sales grew for four months in a row since the period ending in October 2018. Higher sales at motor vehicle and parts dealers, and general merchandise stores were partially offset by lower sales at food and beverage stores. Sales were up in 6 of 11 sub-sectors, representing 62.5% of retail trade. Retail sales in volume terms increased 0.2%.

Rail blockades and COVID-19
Approximately 25% of Canadian retailers reported that their business activities in February had been affected by the rail blockades and/or COVID-19. While a number of retailers reported impacts on their business activities, less than 0.5% of Canadian retailers were shut down for any period of time in February. Shutdowns ranged in length from 1 to 14 days. 

Approximately 12% of retailers reported that both the rail blockades and COVID-19 had negatively affected their sales in February. Negative impacts were more frequently reported by electronics and appliance store retailers as well as gasoline stations. In contrast, 1.6% of retailers reported higher sales as a result of these disruptions, with sporting goods, hobby, book and music stores, building material and garden equipment and supplies dealers and health and personal care stores more commonly reporting a positive impact. 

At least 8.7% of retailers reported that their activities had been affected by COVID-19, while 5.2% reported that their activities had been affected by the rail blockades. Both disruptions led to transportation delays, which caused retailers to wait longer to receive their materials and slowed down the movement of products to market. Retailers also noted lower levels of customer traffic in February due to COVID-19. 

On an unadjusted basis, the largest estimated impacts on sales in dollar terms were in motor vehicle and parts dealers (-$171 million), gasoline stations (-$93 million) and miscellaneous store retailers (-$68 million). However, it was very difficult for respondents to provide distinct estimates of the respective impacts of the rail blockades, COVID-19, or other specific events on their business activities. Therefore, estimates of impact should be interpreted with caution. 

Sales at motor vehicle and parts dealers, which are the retail industry’s largest sub-sector, grew by 1.1% in February. Since the beginning of March, the sub-sector has been affected by efforts to reduce the spread of COVID-19, which could lower sales in coming months.

General merchandise stores sales grew 1.4% in February, their largest increase since June 2019 (+3.0%). Many retailers in this sub-sector were deemed essential and continued to operate in March, while retailers in other sub-sectors temporarily closed or increased their e-commerce presence. This will likely drive a shift in consumer demand toward the general merchandise store sub-sector, which could positively affect its sales.

Sales at gasoline stations were up 0.6%, while they rose 0.3% in volume terms. 

Core retail sales, which exclude motor vehicle and parts dealers and gasoline stations, fell for the second consecutive month, down 0.1% in February. This was primarily attributable to declines in food and beverage stores (-1.0%), led by supermarkets and other grocery stores (-1.0%). 

Retail sales in Ontario rose 0.7% as a result of higher sales at motor vehicle and parts dealers. In the census metropolitan area (CMA) of Toronto, retail sales were up 1.5%.

For the first time in two months, retail sales in Alberta (-0.4%) declined. This was primarily attributable to declines at food and beverage stores and gasoline stations.

Following a 2.2% gain in January, retail sales in Quebec fell 0.4% in February. In the CMA of Montréal, retail sales increased 1.4%.

On an unadjusted basis, retail e-commerce sales were $1.6 billion in February, accounting for 3.6% of total retail trade. On a year-over-year basis, retail e-commerce increased 17.8%, while total unadjusted retail sales rose 7.0%.

In March, many Canadian retailers opened or expanded e-commerce platforms in response to social distancing measures and physical store closures. These changes are captured in the Monthly Retail Trade Survey, and will be reported in the March data release.

Source: Statistics Canada