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February is a short month, and its retail sales usually amount to only about 7% of the year’s total. However, this one was special. The 2010 Winter Olympic Games in Vancouver sparked Canadian optimism, and retailers were the beneficiaries.
The March Consumer Confidence Index rose 4.3 points to 92.6. After a small dip in February, the index now stands almost 10 points above its December level.
Retail sales also continued their recovery in February. Non-automotive retail sales were up 3.1% from their 2009 level, and more importantly, up 1.4% from 2008 levels. Given the weakness of last year’s markets, it is encouraging to see retail sales surpass their pre-recession figures.
Building and Outdoor Home Supplies Stores led all major categories in February by posting a sales increase of 6.9%. This growth comes on the heels of a very strong January (last month of eligibility for the home renovation tax credit) that saw this category increase its sales by 19.2%.
After suffering through the recession more than just about anyone else, Building and Outdoor Home Supplies retailers are now up 1% from their February 2008 levels.
The positive effects of the country’s February Olympic fever were most noticeable in the Clothing and Accessories Stores (up 6.3%) and General Merchandise Stores (up 4.8%) categories; which were led by HBC’s exclusive “must have” item of the month, the red mittens.
Within the Furniture, Home Furnishings and Electronic Stores category (up by 2.1%), we find that Furniture and Home Furnishings Stores continue to perform strongly (up 6.9%); while Computer, Software, Home Electronics, and Appliance Stores continue to struggle (down -2.8%). The delay of the iPad’s Canadian release will only exacerbate what has been a tough stretch for retailers such as Future Shop and Best Buy Canada.
Pharmacies and Personal Care Stores also had a good February (up 4.5%), and Food and Beverage Stores managed to post an increase of 1.6%. Within this category, Specialty Food Stores and Beer, Wine, and Liquor Stores posted Olympic-boosted sales increases of 5.9% and 6.2% respectively.
On the regional front, the Gold Medal goes to British Columbia! This province managed to post February sales that were 8.5% higher than last year. The trend for the remainder of the country remains unchanged with the provinces east of Manitoba leading the retail growth.
Retail sales in 2010 will be affected by several market distortions. We have already experienced the effects of Olympic Games and what the renovation tax-credit deadline did to Building and Outdoor Home Supplies Stores sales in January. As the HST comes into effect in Ontario and British Columbia on July 1st, we expect to see a similar phenomenon with unusually high retail sales for the affected categories.
Release Date of the Next National Retail Bulletin: May 21, 2010
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For more information, please contact John Archer or Maureen Atkinson (416) 921-4181 or e-mail or info@jcwg.com; Website: www.jcwg.com
Please note:
The J.C. Williams Group National Retail Bulletin compares the latest monthly release of “raw” (i.e., unadjusted for seasonality) retail sales figures to those in the same calendar month of the previous year. Statistics Canada also reports seasonally adjusted sales that are compared to the previous month within the current calendar year to measure change in Gross Domestic Product (GDP). Although other sources use seasonally adjusted figures, J.C. Williams Group believes that using raw figures and making comparisons to the previous year’s performance more accurately reflects the seasonality of the retail industry and, therefore, are more useful in analysis.
