December retail sales dip 3.4% to $53.38B

OTTAWA • Canadian retail sales slumped by 3.4 per cent in december to $53.38 billion, the biggest monthly drop since April, as COVID-19 restrictions forced many businesses to shut down, Statistics Canada said on Friday.

Analysts in a reuters poll had on average, forecast a 2.5 per cent decline in overall sales in december. Statcan revised November’s gain up to 1.8 per cent from an initial 1.3 per cent.

The pain is likely to continue into January, since Statcan said preliminary data suggested sales had dropped 3.3 per cent.

“For the next few months, while many restrictions remain necessary, consumption, particularly of services but potentially of goods as well, will still be constrained,” said royce Mendes, senior economist at CIBC Capital Markets.

Mendes though said the Statcan figures most likely overstated december’s decline, since the data did not capture sales by many large online merchants.

december sales fell in nine of 11 subsectors, representing 83.6 per cent of retail trade.

In volume terms, they dropped 3.6 per cent.

“With the resurgence of COVID-19 cases in Canada, provincial governments began to reintroduce physical distancing measures, which directly affected the retail sector,” Statcan said. Around 15 per cent of retailers were closed at some point in december.

Overall, 2020 retail sales fell 1.4 per cent from 2019, the largest year-on-year dip since the 2009 recession.