- Retail sales increased 0.4% in January
- Soft start to 2020 will get much worse as containment measures kick in
That retail sales edged up 0.4% in January will carry little or no weight in markets or from policymakers given the dramatic shock to come. The January numbers themselves were not particularly strong – excluding prices, sales were up just 0.4% from a year ago suggesting that soft trends in retail last year persisted early in 2020. But changes in the retail space in January are bound pale in comparison to the dramatic disruptions to follow with an ever-increasing tide of announcements of reduced hours and store closures. February sales will likely already be impacted to a degree with much larger declines to follow. One exception will be food stores. Grocery stores have never been busier and, despite what looks like panic-buying at times, there have been no suggestions that supply of essential products is actually limited. Online sales also, presumably, could see a boost. But a large chunk of those (sales by non-Canadian online retailers) will not be counted in the monthly retail sales data anyway. Of course, if other countries are a guide, the social distancing measures, containment/closure of stores, offices, etc. being introduced to contain the spread of the virus should work, and these disruptions will ultimately be temporary. In the mean-time, though, it appears we may be in for some shockingly bad economic numbers.
