Retail sales in Canada plunged by 1.8% in December across all provinces as the spread of the omicron variant hurt holiday shopping, according to data released by Statistics Canada on Friday.
The fast spread of the variant led to tightened restrictions and limited capacity at stores across the country. Fewer shoppers in the stores and lower gathering limits meant fewer goods purchased.
Adding to the challenges, flooding in British Columbia and the Atlantic provinces continued to hurt transportation and, in turn, retailers.
The lower sales in December could also be a result of shoppers heeding the warnings about empty shelves because of supply chain shortages and making their holiday purchases earlier.
Sales at furniture stores and clothing stores declined the most, by 11.3% and 9.5%.
Sales at furniture stores and clothing stores declined the most, by 11.3% and 9.5%, respectively. This is the direct result of people staying home to avoid the virus.
In contrast, food and beverage stores, which sell essential items that were consumed more during the holidays and that could not be ordered ahead, had a modest decrease of 0.7%.
Motor vehicle and parts dealers’ sales rose by 0.5%, the only major category to increase. This increase was driven by a rise in auto parts and accessories.
Despite the month-over-month decline, retail sales showed strong gains over the previous December, rising by 11.6%, with the annual increases coming across all sectors and all provinces. This is partly because of the comparisons to the low levels of 2020, before the economic recovery had started to take hold.
Car sales led the year-over-year growth this past December, with new car sales up by 18.5% and used car sales up by 21.7% amid limited inventory and soaring prices.
And consumers continued to fix up their homes, feeding the 14.1% increase in home improvement sales from 2020. Clothing sales jumped by 20.6% on the year as people could finally leave their homes, nearly recovering to the pre-pandemic level.
Looking ahead, though, February’s sales stand to be no better than January’s because of the trucker protests that shut down Ottawa and spread to other parts of the country. The protests and border blockades will also worsen the shortages caused by supply chain bottlenecks, hurting retail sales for the first quarter overall.
