Canadians Show Their Resiliency in September Retail Sales
Original release date: November 22, 2022
Canadian retail sales saw continued growth, but at a lower rate than previous months, with All Stores up 6.8% YOY, with All Stores Less Automotive up 7.0% YOY, and All Stores Less Automotive, Food and Pharmacies up 8.4% YOY. As previously predicted, the impressive sales in Canada are starting to slow.
Clothing and Accessories Stores saw a significant sales increase in September, up 10.8% YOY. August and September are prime back to school shopping periods, and this year was no different. Back to school in 2022 was compounded by mounting pressure on employees to return to work so this category was well positioned to perform. The U.S. saw discretionary categories decrease in October, but Canadians are seeming more resilient. According to Ipsos, Consumer confidence in Canada is slightly negative, but is not nearly as low as other large nations like the U.S. and the U.K. With employment numbers remaining high in Canada, maybe this recession will be a soft landing rather than a drop.
Convenience Stores, following the trend being seen this year, continues to be down, -4.0% YOY in September. This is likely due to the following factors:
- As stated previously, a share of convenience sales are going to pharmacies, who are experiencing increased profits. For example, many parents are likely spending more time at a wide range of pharmacies in a search for medications.
- Convenience Stores are more expensive (on a per unit basis) when compared to buying in bulk. The Costco’s and Walmart’s of the world are still seeing increasing sales as they are being seen as the cheaper option.
- Dollar stores, who are often directly competing with convenience for single serve snacks/beverages, are seeing increased profits. Many of them, like Dollar Tree, are expanding their store networks.
Retailers are now fully in holiday mode, which continues to be of interest to the JCWG team. As reported last month, this year’s projections holiday season are showing a downturn of 17%. Some questions we are asking this month around holiday sales include:
- How many people will have completed their holiday shopping by the end of November?
- Why are retailers rolling out Black Friday sales so much earlier in 2022? (For example, Sport Chek ends their “Black Friday” sales two days before Black Friday.)
- When will Boxing Day sales start in 2022, considering how early Black Friday started?
- Will people continue to attempt to avoid large shopping crowds with Canada’s current “multi-demic”?
- How have YOUR holiday strategies changed for 2022?
Reach out to the JCWG team to analyze your holiday performance and update your strategies. Check in with us next month to see how October sales have changed.