- Retail sales jumped 23.7% in June, back above February (and year-ago) levels
- Bounce-back broadly based as stores re-opened
- Pace of growth slowed sharply in July
The 23.7% surge in retail sales in June was widely expected after Statistics Canada reported a preliminary 24.5% estimate a month ago. Still, the bounce-back in retail sales has been much quicker than feared in the spring. Sales were back 1.3% above February levels in June, and 3.8% above year-ago levels after falling by almost a third over March and April.
Stores continued to re-open as virus containment measures eased. About 9% of retailers were reportedly closed during June (for an average of one business day.) That was down sharply from 23% closed in May and about a third in April. Sales at clothing stores more-than doubled for a second straight month, but were still more than 20% below February levels. Auto sales were also still down from February (despite a 53% jump in June), but most other sectors were back above pre-shock levels – in some cases (general merchandise stores, and sporting goods, for example) by a substantial margin.
The re-opening of brick-and-mortar stores also meant a smaller share of sales were made online, although e-commerce sales were still up a whopping 71% from a year ago, and the share of e-commerce sales in total retail sales was still above pre-pandemic levels.
Sales growth appears to have slowed dramatically in July. The preliminary estimate for that month was up just 0.7%. That is less concerning given the bounce-back into June, but does suggest that pent-up demand won’t provide the same near-term boost to the retail sector as it has in housing markets (where home resales have surged to well-above year-ago levels in the summer to help make up for delayed transactions in the spring.) Still, our own tracking of card transactions is tracking stronger than that preliminary estimate, and the 4-week extension of the CERB program, and modifications to the EI program announced yesterday will continue to help cushion the household income hit from what are still very weak labour markets.
