Original release date: July 22, 2022

Canadian retail sales showed their volatility in May as All Stores grew 15.3% YOY, with All Stores Less Automotive up 14.2% YOY, and All Stores Less Automotive, Food and Pharmacies up 24.0% YOY.

Clothing and Accessories Stores continued their impressive growth trajectory, up 89.7% YOY. Even with graduations, weddings, and concerts returning, this enormous growth is still very impressive. Aritzia, like many other clothing retailers, saw a significant jump in their net revenue (up 65.2%). JCWG thinks that this is, again, a result of fashion items being “feel good” items. We became used to buying online, but it’s hard to shop online. Shopping is fun, social and tactile, which online (in its current state) cannot achieve. Going to a Clothing and Accessories retailer is a relatively inexpensive way to feel good and interact with the public and your friends again. This is being seen in everything from shopping centres to main streets like the Downtown Yonge BIA in Toronto who is seeing increased traffic, up over 200% over the Victoria Day long weekend.

We were very surprised by one category in May, Home Furnishings Stores are up 36.4% YOY. This could be a result of people staging their homes for sale with inflated housing prices, or people furnishing their newly purchased homes. Consumers will likely want to stay put considering inflation, if they are even able to consider the impending recession and the prevalence of variable rate mortgages. We predict this segment to continue rising more gradually, but still rising a healthy amount. Consumers will likely be weary of doing full renovations, and furniture is a much cheaper way to spruce up your home.

Supermarkets and Other Grocery Stores were down -3.2$ YOY, another statistic that surprised us. Grocery prices remained elevated in May, with prices up 9.7%. This may be related to the fact that people are continuing to go to restaurants, and purchase house brands rather than national brands, as we noted in April.

Overall, May was very unpredictable for Canadian retail sales. People have new shopping patterns, and many of them still haven’t figured those out for themselves. We are at a point where we can understand future pandemic waves and anticipate how we need to behave through a purchasing lens, but for many people (most Millennials and all of Gen Z) this is their first ever recession as income earners and they are still learning how to behave with their finances. Some questions we are asking this month are:

• How much are consumers already preparing for the recession?
• Where will customers continue to return to the most (shopping centres, main streets, etc.)?
• When will consumer spending return to being more predictable?
• What will YOU implement to better anticipate your customer’s changing shopping patterns?

Reach out to JCWG for help anticipating consumer shopping habits and traffic patterns and join us next month to see if we see a little more predictability in June.