Store sales fall in March
OTTAWA – Furniture store sales fell for the third consecutive month in March 2020, according to the latest preliminary figures from Statistics Canada. Most observers attribute the severity of that month’s decline, which was also felt by both home furnishings and electronics and appliance stores, to the evolving COVID-19 pandemic, which prompted governments of all levels across the country to shut down large parts of the economy.
In its latest retail trade data release, Statistics Canada set furniture store sales at an actual and preliminary $723.2 million, an 11.4% decline from the $816.4 million rung-up in February 2020. It was also down 25.0% from $963.9 million in March 2019.
For the first quarter of the year, furniture store sales were set at $2.45 billion, down 5.1% from $2.58 billion for the same three months last year.
It should be noted with total system-wide revenue of $598.1 million, Leon’s Furniture Limited (LFL) saw its market share climb to 24.4% for the first quarter of year, up from 23.2% for the January to March period of 2019.
Meanwhile, home furnishings stores – which sell everything from accent and occasional furniture to decorative accessories, lamps, lighting and floor covering – had preliminary sales of $421.0 million in March. This was down 8.4% from $459.6 million in February and a 28.0% plunge from the $585.0 million recorded for March 2019.
For the year-to-date, home furnishings stores rung-up sales of $1.37 billion, down 5.1% from $1.58 billion for the corresponding period.
Statistics Canada also set preliminary and actual sales for electronics and appliances at $980.5 million for March, a gain of 15.4% over the $849.5 million in February. Although the evidence is somewhat anecdotal, many observers attribute much of this gain to e-commerce purchases by consumers following shelter-in-place orders designed to the spread of the pandemic. However, these sales were off 10.5% from the $1.53 billion rung-up in March 2019.
Year-to-date sales for these merchants were $2.82 billion, a drop of 5.9% from the $2.99 billion for the first three months of 2019.
Statistics Canada also reported e-commerce sales climbed 40.4% during March 2020, although it didn’t did not provide a detailed breakdown of what retail sectors or product categories experienced this uptick. Both LFL and Sleep Country Canada Holdings – parent of Sleep Country, Dormez-Vous and Endy – said their first quarter e-commerce business experienced significant upswings.
Although most provinces are in the initial stages of re-opening their economies, most oberservers aren’t expected a quick turn around in the second quarter. Most note preliminary data from Statistics Canada for April suggests the worse is yet to come.
“As expected, social distancing efforts and mandated closures in the face of COVID-19 drove the largest decline in retail sales on record,” Omar Abdelrahman of TD Economics said in his research note.
"With some provincial economies starting a gradual re-opening process for some retail stores, we expect some gradual normalization in sales from May onwards,” he continued, adding support programs such as the Canada Emergency Response Benefit should help provide a backstop to the unprecedented loss in employment and income experienced by consumers.
“However, we caution that consumer spending patterns will likely look a bit different over the foreseeable future,” he observed, adding, “household savings rates are expected to rise in the face of elevated economic and labour market uncertainty, prompting consumer caution and substitution away from discretionary purchases.”