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Canadian retail sales fall sharply in March, sales likely to normalize gradually from May
Canada’s retail sales dropped 10 percent sequentially in March, the largest fall since data became available in 1991. Advanced estimates were also provided for the month of April, which shows that sales are likely to fall further by 15.6 percent.
Excluding price changes, retail trade volumes fell 8.2 percent sequentially. Sales dropped in six of the 11 major sectors. The fall was mainly due to motor vehicles and parts dealers and gasoline stations categories, which recorded a decline of 35.6 percent and 19.8 percent, respectively. For gasoline stations, most of the fall was because of prices, with the volume of sales falling only 1.8 percent. Sales also dropped markedly across discretionary spending categories, including clothing and clothing accessories stores, furniture and home furnishing stores, and sporting goods and hobby stores.
Some of the offset to the fall was driven by a sharp rise in sales at food and beverage stores, health and personal care stores, and general merchandise stores, which recorded a rise of 22.8 percent, 4.6 percent and 6.4 percent, respectively. Furthermore, retail e-commerce sales surged 40.4 percent year-on-year.
Province wise, sales dropped in all 10 provinces. Ontario, Quebec and Alberta led the overall decline, with -9 percent, -15.7 percent and -13 percent, respectively. Meanwhile, some provinces with lesser restrictions on retail stores at the time, such as B.C., saw relatively smaller falls.
“With some provincial economies starting a gradual re-opening process for some retail stores, we expect some gradual normalization in sales from May onwards. However, we caution that consumer spending patterns will likely look a bit different over the foreseeable future”, said TD Economics in a research report.