COVID-19 pushed Canadian retail sales to their biggest ever plunge in March

Widespread lockdowns due to COVID-19 across the country pushed Canadian retail sales down by 10 per cent in March, the biggest plunge on record.

Statistics Canada reported Friday that about 40 per cent of Canadian retailers closed their doors in March, as government lockdowns and physical distancing requirements set in.

March’s plunge was more than twice as bad as the previous record of 4.5 per cent, set in February 1998.

The data agency says April’s preliminary numbers suggest that month’s data are likely to be even worse, down 15 per cent from March’s already low level, but the numbers released Friday show just how bad things got in just the first two weeks of lockdown.

Overall, Canadians spent just $47 billion at retailers in March. That’s the worst month since 2016.

Just about every type of retailer saw sales plummet during the month, but those deemed non-essential bore the brunt, including:

• Clothing stores, down 51 per cent.
• Motor vehicle and parts dealers, down 35 per cent.
• Furniture and home furnishings, down 24 per cent.
• Hobby, book and music stores, down 23 per cent.
• Gas stations, down 19 per cent.

There were a few bright spots, namely grocery stores that saw booming business as Canadians stocked up to shelter in place. Food and beverage sales were up 22 per cent, while general merchandise stores had their best month ever, with sales up 6.4 per cent.

Sales at health and personal care stores rose 4.6 per cent, also to their highest level on record. Cannabis sales rose 19 per cent.

Another bright spot was the growth in online retailers, as Canadians spent $2.2 billion online in March. That’s 40 per cent higher than it was in the same month last year.

‘Gradual normalization in sales’ expected in May: analyst 

Economist Benjamin Reitzes at Bank of Montreal noted that online selling was actually probably even higher, since sales at U.S. retailer Amazon aren’t included in Friday’s numbers — even if the sale was made on the Canadian website, Amazon.ca.

“The record drop in March retail sales comes as a surprise to no one [and] April will be more of the same,” Reitzes said. “How quickly we rebound is the more pressing question at this point.”

TD Bank economist Omar Adbelrahman says he thinks the retail sales numbers should start to rebound a little once data from the current month of May come out. Massive government bailout packages for laid-off workers should give people money to buy things, he said, and a loosening of restrictions means more stores will be open to sell to them.

“With some provincial economies starting a gradual reopening process for some retail stores, we expect some gradual normalization in sales from May onwards,” he said.