Retail sales rose for the third consecutive month in July by 0.6% on a seasonally-adjusted basis, close to Statistic Canada's preliminary estimate of 0.7%. This marks a deceleration from the 23% rise in June and a 21% rise in May, as stores were reopening. Sales were up in 6 of 11 subsectors, led by higher sales at auto dealers and at gas stations. Excluding these two subsectors, retail sales declined by 1.2%. Compared to the same time last year, retail sales were up by 5%.
Sales were up in five provinces in July, the most notable increases were in BC, Manitoba, and Alberta. In BC, seasonally-adjusted retail sales were up by 2.1% ($7.6 billion) and by 0.9% ($3.4 billion) in Vancouver. Retail sales were up in the majority of subsectors, except in electronics/appliances and at auto dealers.
Growth in e-commerce sales continued to slow in July, up by 63% year-over-year, following a 71% rise in the previous month. The slowdown is a result of the expansion of the reopening of physical stores. In July, e-commerce sales totaled $2.8 billion, accounting for 4.8% of total retails sales, down from 5% in the previous month. This excludes Canadians purchasing from foreign e-commerce retailers.
Early estimates provided by Statistics Canada for August suggest that retail sales increased by 1.1%. Overall, the recovery in retail sales has been V-shaped with pent-up demand largely dissipated. Government support programs and low interest rates will continue to support retail spending. However, elevated unemployment levels, uncertainty around the continuation of deferral programs, and rising COVID-19 cases could also pose challenges going forward.
Copyright British Columbia Real Estate Association. Reprinted with permission.