B.C. retail spending rises to pre-pandemic levels

Retail spending in B.C. rose for a third straight month in July as consumers re-established shopping habits while an active housing market and domestic tourism further lifted spending.

Total sales at bricks-and-mortar stores rose 2.1% from an upward revised June to reach a seasonally adjusted $7.56 billion.

After a decline of 22% from February through April, the monthly sales flow has fully recovered with July’s increase. Sales sat 2.3% above February levels in July. Actual unadjusted retail sales rose 7.8% year over year.

Among store segments, trends were broadly positive. Year-over-year sales accelerated in furnishing and furniture and building materials stores (both up 11.3%), while sales at electronic and appliance stores were up a robust 13.3%, albeit slowing from June. This points to a rise in ancillary spending related to rising home sales, which have surged across the province.

Sales at clothing and footwear stores also firmed following closures in the spring months but remained 16.1% lower than same-month 2019. Regionally, Vancouver metro area sales lagged behind the rest of the province with a monthly increase of 0.9% and a year-over-year gain of 3.1%. In contrast, spending rose 3.1% from June and nearly 8% year over year elsewhere.

Rebounding retail spending has lifted spending to within 3% of 2019 year-to-date levels and signals a solid recovery in goods spending. That said, overall consumer spending has been softer amid weaker spending on restaurant meals, travel and personal services.

Retail spending growth will further diminish given underlying economic conditions. Unemployment remains elevated and fiscal income supports to households and businesses are set to decrease. The domestic tourism boost this summer will also wane as families head back to school after the summer, while international tourism remains essentially shuttered and conferences and events are nonexistent.

Multiple Listing Service home sales continued to surge through August. B.C. sales rose 16% from July to a seasonally adjusted 9,878 units and marked the highest pace of monthly sales since mid-2016.

After an initial decline of 60% from February through April, sales have more than bounced back to 45% above pre-pandemic levels. •

Bryan Yu is deputy chief economist at Central 1 Credit Union.