Retail sales plummet in March
May 22, 2020
Focus Area—Canadian Economics
The Conference Board of Canada’s Senior Economist Richard Forbes offers the following insights on today's release of data on retail trade:
“Today’s Statistics Canada release showed that retail sales fell 10.0 per cent in March, marking their largest monthly decline on record. Clothing stores were the hardest hit. The segment has experienced widespread storefront closures and is being impacted by a reduction of consumer spending on discretionary goods such as new clothing items. In contrast, grocery stores saw their sales surge as households have been stockpiling food in response to the pandemic.”
- Retail sales fell 10.0 per cent in March compared to the previous month. That marks their largest monthly decline since Statistics Canada began publishing the data nearly 30 years ago.
- Sales declined in 6 of 11 subsectors. The largest declines were at clothing stores and motor vehicle dealers, where sales fell by 51.3 per cent and 35.6 per cent, respectively.
- In contrast, sales at food and beverage stores rose 22.8 per cent, while sales at health and personal care stores increased 4.6 per cent. The results support the notion that demand for food and medical supplies has risen sharply due to the pandemic.
- After taking into account price changes, total sales volumes fell an unprecedented 8.2 per cent in March.
- Sales fell in all 10 provinces, with Quebec and Alberta posting the largest declines. Meanwhile, Saskatchewan and Newfoundland reported the most modest reductions in sales.
- The pandemic has caused many Canadian households to purchase goods online rather than in store. As such, retail e-commerce sales surged 16.3 per cent in March.
- This morning’s release supports our forecast that Canada will be in for its worst economic downturn in decades due to the COVID-19 crisis. We expect the Canadian economy to contract throughout much of the first half of 2020 before rebounding in the third quarter of the year.