Canadian retail sales down in April, as e-commerce sales soar

Retail sales dropped 26.4% in April, as e-commerce transactions were up 56%

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The Aritzia store at the McArthurGlen Designer Outlet Vancouver mall opened earlier this month | Rob Kruyt

Canadians' shift to online shopping during the COVID-19 pandemic was clear from Statistics Canada data released June 19.

Not only did the month-to-month numbers show substantial growth for online shopping, as retail sales fell, but the year-over-year figures showed even more stark increases for shopping online.

The nation's number cruncher said retail sales across the country fell 26.4% to $34.7 billion in April, compared with March. E-commerce sales, which were part of that total, soared 56%, to $3.4 billion April, compared with March. 

The shift toward e-commerce is even more substantial when comparing April retail sales to the same month a year ago. Retail sales fell 32.5% in April, compared with April 2019, while e-commerce sales more than doubled. Online sales were up 120% in April, compared with April 2019, and there are indications that this jump is really much steeper.

"I don't think Amazon is included in those numbers because it is an American company that has a loose Canadian affiliation," retail analyst and Retail Insider Media owner Craig Patterson told Business in Vancouver

"The e-commerce numbers are much, much, much, much higher."

The trend toward e-commerce in Canada still lags what it could be because many small retailers do not have websites that enable online sales. BIV has spoken with local retailers, such as LaLa’s owner Kristina Egyed, who navigated what can be the challenging task of setting up an e-commerce website, and have found success

Many more of those small businesses remain without the ability to transact online, Patterson said.

"If retailers had actually been amplifying their e-commerce presence as they should have been, before all of this, and a lot of them are playing catch-up now, I would expect e-commerce to be even higher," he said.

Essential retailers, such as grocers, stayed open in April but most businesses, particularly fashion retailers, closed across the country. In B.C., this was the case even though provincial health officer Bonnie Henry never ordered those businesses to close, and the result was tragic for some, such as Army & Navy, which has closed permanently

Fashion retailers in Canada in April saw the largest sales declines, at about 69%, while furniture stores saw a 50.6% drop in sales, month over month.

"Clothing stores have been the hardest hit by the pandemic, as sales in the subsector were down an astounding 85% since February," Conference Board of Canada senior economist Richard Forbes told BIV in a statement. "Thankfully, it appears that the worst period for retailers is now behind us, and a recovery in retail sales is likely to have begun in May.”

Food and beverage sales fell 12.7% in April, after soaring in March – indicating that many shoppers stocked up on essential items in case they had to go into a long quarantine at home, and then slowly started to dig into that stockpile in April. 

"The worst period for retail sales is likely now behind us,"  Forbes said. "Restrictions around most of Canada eased this spring, allowing many retailers to begin operating again. Preliminary estimates from Statistics Canada indicate that retail sales increased by around 20% in May."

U.S. retail sales for May were released earlier this week, and the 17.7% jump in May was more than twice what economists had been expecting.