Rise in online shopping moderates COVID-19 impact of the pandemic on retail sales
In 2020, with the onset of the pandemic, retail sales were impacted as consumers changed their shopping habits and retailers changed their business practices. Retail customers spent $669.6 billion at Canadian in-store and non-store retailers in 2020, resulting in a slight 0.1% decline in operating revenue from the previous year. The effects on retail sales have varied across the sector, with consumers and businesses facing regional shutdowns, labor shortages, factory closures, supply chain disruptions supply and increased operating costs related to the pandemic.
Retail prices notably increased for passenger vehicles (+2.4%), food purchased from stores (+2.4%), fresh vegetables (+3.0%) and meat (+4.0%). 5%). Inflation slowed to 0.7% in 2020 after rising 1.9% in 2019 as lower gasoline prices offset higher food prices. Retail sales in volume decreased by 2.0% in 2020.
Online retail continues to grow
In 2020, retail e-commerce sales grew by 85.7% after restrictions on in-store purchases pushed more consumers online and retailers adapted their service delivery. E-commerce operating revenue accounted for 7.8% ($52.5 billion) of total in-store and non-store retail revenue in 2020, up from 4.2% in 2019.
Motor vehicle and parts dealers and gas stations lead decline in store sales
Changes in operating revenue varied widely across the retail sector in 2020, with 5 of 11 store sub-sectors posting losses. These were concentrated in two sub-sectors: motor vehicle and parts dealers, and service stations. Higher sales at food and beverage stores, general merchandise stores, and electronics and appliance stores largely offset these declines.
In 2020, sales in the largest subsectorr—mvehicle and auto parts dealerSouth Dakotarose 7.0% to $161.5 billion as new motor vehicle sales fell for the first time since 2009. New car dealers, which accounted for more than three-quarters of all sales of the sub-sector in 2020, saw their sales decrease by 9.1% to $124.4 billion. According to the results of the New Motor Vehicle Sales Survey, this decline was due to lower dollar sales of passenger cars (-30.1%) and trucks (-13.4%).
Gas station operating revenue fell 16.7% to $54.2 billion in 2020, the largest decline since 2015 (-14.1%). This decline is mainly due to lower fuel prices at service stations, which fell by 14.0% in 2020.
Sales up at food and beverage stores and general merchandise stores
Sales increased 8.8% in the second largest subsector, food and beverage stores, reaching $142.9 billion in 2020. Grocery stores are considered essential retailers in the context of the pandemic over restaurants, which have been forced to restrict indoor dining, causing many consumers to change their spending habits. According to the Monthly Food Services and Drinking Places Survey, sales fell 28.2% in 2020.
In 2020, sales at general merchandise stores increased 7.6% to $78.8 billion. According to the Retail Commodity Survey, food in retail stores accounted for approximately one-third (32.8%) of general merchandise store sales in 2020, followed by household furniture, furnishings, household items, appliances and electronics (21.9%).
Operating revenue down in nine provinces
In 2020, operating revenues for store retailers fell in all provinces except British Columbia, where they increased by 1.0%. Ontario led the decline in total operating revenue (-$5.9 billion; -20.5%), followed by Alberta (-$1.9 billion; -2.3%).
Ontario (37.1%), Quebec (21.8%), British Columbia (14.1%) and Alberta (13.1%) accounted for the largest shares of operating revenue in 2020, representing a combined $541.2 billion (86.1%) of total operating revenue.
Margins increase for Canadian retailers
Retail gross margins increased slightly from 26.5% in 2019 to 26.8% in 2020. Gross margins increased in 6 of 11 retail subsectors. The strongest increases were recorded by electronics and appliance stores (+2.8%) and gas stations (+0.8%). Retailer operating profit margins increased slightly from 4.6% in 2019 to 4.9% in 2020.
The cost of goods sold by in-store retailers fell 1.7% to $460.1 billion in 2020. Cost of goods sold accounted for approximately 73% of total operating revenue.
Total operating expenses, including labor compensation, fell 1.3% to $137.5 billion in 2020.
In anticipation of 2021
The estimates contained in this release are for 2020. Although the financial estimates for 2021 are not yet finalized, a first look at preliminary results is available in the December 2021 Monthly Retail Trade Survey data release. Retail businesses faced many challenges in 2021, including extreme weather conditions, higher prices, supply chain disruptions and ongoing labor issues.
Notice to readers
Data has been revised for 2019.
Trucks include minivans, sport utility vehicles, light and heavy trucks, vans and buses.
Since October 17, 2018, the date cannabis was legalized, the Annual Retail Survey collects and disseminates in-store and e-commerce sales statistics for licensed cannabis stores.
For more information on online shopping, check out the latest infographic, “Online Shopping During COVID-19 pandemic.”
Data is collected for the 12-month fiscal period ending on or between April 1, 2020 and March 31, 2021. For some companies, this means reporting primarily on pre-pandemic operations. Therefore, the effects of the pandemic are not fully reflected in the estimates for this reference year and will extend to the estimates for the reference year 2021.
These and other data related to business and consumer services can be found on the Business and consumer services and culture statistics portal.
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