Retail Getting Back On Track (Mostly)

Retail sales growth has cooled off a little more with total Canadian retail sales up 5.8 per cent year-over-year in the third quarter of 2021, which is more in line with historical performance, says Ed Strapagiel, a retail consultant. Even so, this result is buoyed up by gasoline prices. Excluding gas stations, third quarter retail sales were up just 3.9 per cent. The three-month trend is weakening and may slip further. The underlying 12-month trend appears to have peaked and is likely to soften a little more by the end of the year. All the major retail sectors, even eCommerce, are more or less following this ‘on the way back to normal’ pattern. The food and drug sector had record high retail sales growth last year as the COVID pandemic raged. Since then, however, performance has quickly come down. Retail sales in the store merchandise sector took a big hit in 2020 due to COVID related store and shopping mall closures. This was followed by a significant growth spike in the second quarter of 2021, which more or less reversed previous losses. This rebound is now in the process of abating. Canadian eCommerce retail sales benefited greatly from COVID, but now things have reversed. In the third quarter, total eCommerce sales were actually down 1.6 per cent year-over-year, the first time a three-month decline has occurred since Statistics Canada began reporting the numbers.