Retail Sales Fall as Discretionary Spend Remains Low

Canadian retail sales slumped in March, with discretionary spend stores declining 2.5 per cent year-over-year, according to J.C. Williams Group’s (JCWG) most recent national retail report.

While March experienced two fewer shopping days due to the timing of the Easter long weekend, this is only a small factor as high levels of inflation continue.

Furniture stores saw sales slip 2.58 per cent from March 2023 to March 2024. Home furnishings stores experienced a greater drop, down 6.66 per cent. Bucking the trend was electronics and appliance stores, which saw sales increase 3.71 per cent over the same time period.

The JCWG report also reveals that retail in general is seeing fluctuating footfall in Canada. Shopping centres were down approximately 6.3 per cent at the end of March, compared to the same month last year. While this does not immediately correlate to sales, it can help predict the prevalence of browsing and potential future purchases.

Building material and garden equipment stores experienced a sales decline of 4.7 per cent over the same time period. Both Lowes, now operating under the Rona+ banner, and Home Depot reported decreased sales in the first quarter of 2024, down 4.4 per cent and 2.3 per cent, respectively, year-over-year. Lowes saw both average transaction size and number of transactions drop. Overall, these decreases are a result of fewer discretionary sales, as well as declines in consumers taking on large-scale projects like home remodels.

Home Depot, whose sales also dipped, may not have had such a large decrease as a result of a higher contractor sales percentage. Contractors make up approximately 20 to 25 per cent of Lowe’s sales, whereas they make up about half of Home Depot’s.