Many Canadian retail stores closed, but households are still finding ways to spend. Statistics Canada (Stat Can) data shows retail spending made a big jump in February. The rise in sales was strong in the building materials and gardening categories. Combined, both of those trends represented nearly a third of all annual growth. The combination is often spin-off economic activity from home resales.
Canadian Retail Spending Is Up 6% From Last Year
Canadian retail sales printed big growth, despite various pandemic lockdowns across the country. Retail sales reached $55.1 billion in February, up 4.8% from a month before. It works out to an increase of 6.0% from the same month a year before. Remember, February 2020 was pre-pandemic and pre-lockdowns.
Canadian Core Retail Spending Is Up 9.3%
Core retail spending, which excludes motor vehicle and parts dealers as well as gasoline, made a bigger annual rise. Core retail came in at $35.8 billion in February, up 3.8% from the previous month. The month is 9.3% higher when compared to the same month a year before. The monthly increase is still a little more tempered, but the annual increase is much larger.
Home Renovation and Gardening Represented A Third of Growth
One of the biggest trends is related to housing — building and garden supplies. Retail numbers came in at $4.21 billion in February, up 3.5% from the month before. This works out to an increase of 29.0% when compared to the same month a year before. The annual growth is the highest of any of the major components. The annual growth also represents 31.05% of core retail growth.
Canadian February Retail SalesThe year-over-year percent change of retail sales and its major subcategories for February 2021. Source: StatCan; Better Dwelling.
When building supplies are combined with furniture, it adds up to a lot of spending on homes. Combined spending in these categories works out to 16.64% of retail spending in February. The categories managed to capture 1.67 more points of retail spending than a year before. These are two major components of spin-off economic activity from home sales. Normalization of home sales is likely to pull back on this number later.
Car Sales Are Also Soaring
One more significant trend is car sales, which have been on fire since the pandemic. Households spent $14.44 billion at motor vehicle and parts dealers in February. This is 5.0% higher than it was the month before, and 3.2% bigger than a year ago. More personal transportation may feed into the trend of living further from city centers. However, more validation would be needed to see how this works out, and where registrations end up.
Retail spending is up despite a big shift in where consumers are spending their money. While looked at in aggregate things look fine, but like all-things pandemic — there was a shift. Small businesses are mostly shuttered. Spending dollars are likely landing at these businesses in much smaller quantities. However, a lot more is being pumped into big box stores — especially for renovations.
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