Canada’s retail sector experienced a slight downturn in March 2024, with sales dipping by 0.2% to $66.4 billion, according to recent data released by Statistics Canada. This marks a modest but notable shift in the retail landscape, reflecting broader economic trends and consumer behaviors.
The decline in retail sales was observed across seven of the nine subsectors, indicating widespread softness in the market. Leading the downturn were furniture, home furnishings, electronics, and appliances retailers, which saw a significant reduction in sales. This sector alone reported a 1.6% decrease, highlighting a potential shift in consumer priorities or economic constraints impacting discretionary spending.
Core retail sales, which exclude gasoline stations and motor vehicle and parts dealers, fell by 0.6%. This represents the first decrease in core retail sales in four months, underscoring the broad-based nature of the decline. Within the core retail category, nearly all subsectors experienced downturns. Notably, food and beverage stores saw a 0.4% drop, while sporting goods, hobby, musical instrument, and book retailers faced a 1.5% decrease. Clothing and accessory stores also experienced a notable decline of 1.6%.
Despite the overall downturn, certain sectors bucked the trend. Building material and garden equipment and supplies dealers reported a 1.3% increase in sales, suggesting a continued investment in home improvement and gardening projects.
Motor vehicle and parts dealers also reported positive performance, with a 1.0% increase in sales, driven primarily by new car sales, which were up 1.1%. This marks the second consecutive month of growth for this sector. However, used car dealers faced a 2.0% decline, indicating variability within the automotive market.
Gasoline stations and fuel vendors saw a decrease of 0.7% in sales, with a more pronounced drop of 1.7% when measured in volume terms. This decline reflects broader trends in fuel consumption and possibly fluctuating fuel prices.
Geographically, retail sales varied significantly across Canada. Six provinces reported decreases in retail sales, with Ontario experiencing the largest drop at 0.3%. This decline was driven by lower sales in sporting goods, hobby, musical instrument, and book stores. Conversely, Toronto saw a 1.5% increase in sales, demonstrating regional disparities within the province.
Saskatchewan faced the steepest decline at 3.4%, primarily due to reduced sales in motor vehicle and parts dealers. Meanwhile, Quebec emerged as a bright spot, recording a 0.6% increase in retail sales. Montreal also saw a positive shift with a 0.3% increase, suggesting localized economic resilience.
Amid the overall retail downturn, e-commerce continued to grow. Seasonally adjusted retail e-commerce sales rose by 3.0% to $4.0 billion in March, making up 6.0% of total retail trade, up from 5.8% in February. This growth highlights the ongoing shift towards online shopping, a trend accelerated by the pandemic and sustained by consumer preferences for convenience and safety.
Looking ahead, preliminary estimates for April 2024 suggest a potential rebound in retail sales, with an anticipated increase of 0.7%. However, this figure is based on partial survey responses and is subject to revision. The advance estimate was derived from responses covering 51.0% of surveyed companies, compared to the average final response rate of 90.5% over the past year.