Inflation Looms over Canadians’ Minds in March
Original release date: May 26, 2022
Canadian retail in March was a mixed bag, with many categories performing worse than their 2022 average so far. All Stores grew by 4.2%, with All Stores Less Automotive growing less at 3.4%, and All Stores Less Automotive, Food, and Pharmacies back up by 4.6%.
Our top categories this month apart from Gasoline Stations (34.9%) are continuing to be driven by pent-up demand, with Clothing and Accessories Stores taking the lead at 19.0%. This category may also be impacted by a pent-up desire to travel, as evidenced by the high growth of Jewellery, Luggage and Leather Goods Stores at 17.7% year-over-year.
On the other hand, travel is negatively impacting the previously strong Building Material and Garden Equipment growth, down -6.3% year-over-year. This category is top of mind for customers as wood prices and the struggle to find available contractors remains a much-discussed topic. As a result, wary Canadians are looking beyond their homes for leisure while they wait for the home-improvement boom to end, especially with a higher cost of living.
In fact, the higher cost of living could be expected to be seen in Food and Beverage Stores. Instead, this category is up 2.0%, higher than its 2022 average as customers instead adjust to increased prices. Consumers sticking to their food budgets are instead changing their typical buys, which can be seen in the ongoing growth in popularity of store brand products. No Frills’ no name brand has picked up on this and has expanded their collection to include a semi-viral folding chair, with its iconic black on yellow text reading “chair / for sitting.”
Overall, March could mark a turning point for Canadian retail under the new cost of living. Will April flip the script?