Retail sales to hit $31B by ’19: report

A new Conference Board of Canada report offers some long-term optimism for retailers stung by the economic slowdown, forecasting annual sales in the city will surpass $30 billion by 2019.

Following a seven-per-cent sales increase last year, to $27.2 billion, the board expects the local retail sector to slip 0.7 per cent this year before rebounding with 2.7-percent growth in 2016. It forecasts sales will grow 3.5 per cent, 3.6 per cent and four per cent each year after, with sales reaching $30.9 billion in 2019.

Alan Arcand, associate director for the board’s Centre for Mu- nicipal Studies, said the Calgary economy is expected to decline by just 0.5 per cent this year.

“The last recession in 2009, I think, was a much bigger recession. This downturn is not quite as steep,” he said.

Retail sales moving forward are tied into an expectation that oil prices will rise.

“Our call right now is that oil prices will start rising again, gently rising, starting next year, or even late this year, and continue to climb through the forecast,” Arcand said.

“It’s going to climb somewhere from between the lows of today and the highs of previous years. We don’t expect to get back to the days of $100 per barrel over the mean term, but still we think oil prices will climb.”

The retail sector has benefited in recent years from strong employment, population and personal income growth.

The board is forecasting employment growth of 2.3 per cent in Calgary this year, followed by a decline of 0.9 per cent in 2016.

But the following years are expected to see annual employment growth of 2.5 per cent, 1.6 per cent and 1.8 per cent, respectively.

Beginning this year, the board is forecasting annual population growth each year to 2019 of 2.5 per cent, 1.9 per cent 2.2 per cent, 2.3 per cent and 2.3 per cent.

It said personal income per capita for Calgary is expected to rise from $58,327 in 2015 to $62,611 in 2019.

Paige O’Neill, general manager of Chinook Centre, said the mall’s overall sales from April to August have increased two to seven per cent increases monthly. On average it has 1.1 to 1.3 million visitors per month which are similar numbers to last year.

“Given the weaker Canadian dollar, the impact of oil and gas on Calgarians and Canada, we’re cautiously optimistic going into the Christmas season,” she said. “For 2016, we’re anticipating a modest overall centre sales increase between three per cent to four per cent.

“After that, we’ll see how the retail landscape looks on a global scale, timing of new entries, existing retailers reinventing themselves, European retailers looking at the Canadian market and the pace of economic recovery.

“Calgary remains a viable and sought-after environment for new retail entries and investment.”

We don’t expect to get back to the days of $100 per barrel over the mean term, but still we think oil prices will climb.