Business

Retail sales plunged, but online shopping soared as COVID-19 settled in in April

Retail sales fell by more than a quarter in April as shops were hit hard by the COVID-19 pandemic, Statistics Canada said Friday.

Online sales more than doubled while overall retail sales fell by one quarter

Retailers have been hit hard by the pandemic, but stores that can sell online are seeing booming growth. (Hannah McKay/Reuters)

Retail sales fell by more than a quarter in April as shops were hit hard by the COVID-19 pandemic, Statistics Canada said Friday.

The data agency says retail sales fell 26.4 per cent to $34.7 billion in April. Combining April's numbers with data from March means Canadian retailers are down by more than a third from where they were before physical distancing measures were implemented in mid-March.

While essential services such as grocery stores remained open, most retailers did not offer in-store shopping in April because of public health restrictions meant to slow the spread of the pandemic.

The drop in April was almost twice as much as what economists had been forecasting. "April is most obviously cementing its reputation as the worst month for the Canadian economy ever," Bank of Montreal economist Doug Porter said.

"All 11 sectors saw deep declines, and all 10 provinces were down by at least double-digits ...  It's a long road back from these April lows."

The following types of stores saw the biggest sales plunges:

  • Motor vehicles and parts dealers, down 44 per cent.
  • Furniture stores, down 51 per cent.
  • Clothing and accessories stores, down 70 per cent.
  • Gasoline stations, down 32 per cent.

Online shopping sees 120% increase over 2019

But despite the poor showing overall, there was significant growth for retailers who either started or expanded their online presence and curbside pick-up services in response to the closures.

Online sales totalled $3.4 billion during the month, an increase of 120 per cent from last year's level. In total, online selling made up almost 10 per cent of everything sold during the month, an all-time high.

And that figure doesn't even include sales at U.S.-based retailer Amazon, which sells to Canadians but is not included in this set of Statistics Canada numbers because it is considered foreign based. The many retailers that are based in the U.S. but also sell through physical locations in Canada, such as Walmart, are included, however.

"Consumer spending patterns have undergone quite the transformation in recent months," TD Bank economist Ksenia Bushmeneva said.

"As expected, consumers are spending considerably less on travel and lodging, eating out, gasoline and clothing, but considerably more on home renovation and food. Online shopping also continues to rule the day, remaining far more prevalent than it was prior to the health crisis."

About the Author

Pete Evans

Senior Writer, CBCNews.ca

Pete Evans is the senior business writer for CBCNews.ca. Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, Canadian Business Magazine and — believe it or not — Circuits Assembly Magazine. Twitter: @p_evans Email: pete.evans@cbc.ca Secure PGP: https://secure.cbc.ca/public-key/Pete-Evans-pub.asc

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