Canadian Retail Sales See 'Massive' Drop In April, Surprising The Experts
Posted On June 21, 2020
Canadian retail sales plunged for the second month in a row in April, falling 26.4 per cent during the period when the COVID-19 lockdowns were at their peak, according to data from Statistics Canada.
The decline is nearly twice as large as the one seen in the U.S. in April, where sales fell 14.7 per cent. It’s also twice as large as what economists had been expecting for Canada.
Sales were down in all 11 subsectors for the first time in 27 years, with motor vehicle and parts dealers taking the largest hit.
“The drop in April retail sales in Canada was massive – and significantly larger than the 15.6 per cent drop Statistics Canada provided as a preliminary estimate along with the March report,” RBC senior economist Nathan Janzen wrote.
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Ontario saw the steepest drop in sales, down 32.8 per cent, followed by Quebec with a 27.8 per cent drop. Alberta (down 18.4 per cent) and Saskatchewan (down 14.8 per cent) had the mildest drops.
“Retailers were devastated by the shutdowns and physical distancing measures employed in April,” Royce Mendes, senior economist at CIBC Capital Markets, said in a note.
“It wasn’t all bad news in the report though. Retailers who had an online presence were able to capitalize on some of the shifts in buying patterns.”
Online sales surged to a record high, representing 9.5 per cent of the total retail market, StatCan said.
Janzen said the “long road to recovery” likely began in May, as lockdowns began lifting, but noted that Statistics Canada expects that only 40 per cent of the previous months’ losses will have been recovered in May.
“Some form of virus containment measures are likely to remain in place at least until there is a vaccine or more effective treatment – and that will leave the economy operating below capacity for the foreseeable future,” Janzen wrote.
With a file from Reuters
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