December Retail Sales Down, eCommerce Up

There is a lot to digest in the December retail sales numbers released by Statistics Canada today.  The headline for many is that retail sales are down across most sectors including those traditionally thought of as being impacteded by holiday spending. The big influencer is automotive which accounts for almost 25% of retail spending, but even looking at the sub-sectors, all numbers are off for the month. Despite that, the trend line is still going up which is nice to see. Canadian store retailers sales grew 3.7% over 2015 to $532 billion in 2016.

If you read past the headlines and look at the Retail Spending Chart (above), you will notice that the December dip is nothing new. In recent years this decrease has been getting bigger. Of course I can’t normalize to remove automotive (easily) in previous years, but I am left wondering if the rise of the Black Friday/Cyber Monday phenomenon in Canada is partially responsible for shifting more holiday retail spending into November.

I also looked at the e-commerce chart with great interest. You can see that the total sales and the percentage of total retail sales grew significantly in the last quarter. Most significantly, despite the dip in total Retail spending in December, online sales grew. This is fantastic news for established retailers.

Overall the percentage of online sales in Canada is still quite low compared to some other countries. This indicates to me that there is lots of room to grow e-Commerce sales in Canada despite the logistical challenges of servicing such a large market. I am also unable to determine if these numbers represent purchases made from e-retailers based outside of the country. I suspect that they don’t which would likely add a percent or two to these numbers. Another thing that likely under-represents the strength of e-commerce is that this table includes Automotive, and with the notable exception of Tesla, online sales of cars is not yet a thing in Canada.

What is the take away from this news? There has never been a better time for retailers to invest in e-commerce and omni-channel strategies.

Want to learn more?  Visit Statistics Canada.