Sales momentum for B.C. retailers rose through November to reach another record high, although growth slowed.
Total sales reached $8 billion for the first time with a 0.8% increase and seventh straight monthly gain. Year-over-year spending rose 11.1%. Metro Vancouver accounted for the bulk of the increase, with sales up 1.4% from October. In comparison, national growth rose 1.3% from October and 7.5% year over year.
However, sales likely faltered through December and into January amid the pandemic’s second wave and more economic restrictions across the country. Seasonal holiday shopping was likely much lower than usual given the absence of events and celebration. The advance December estimate is for a 2.6% drop in national sales, but B.C. is poised to outperform given fewer restrictions.
While December is expected to disappoint, November’s data underscored key consumer themes. Increased sales were reported by electronic and appliance stores, which rose 30% year over year, up from 20% in October, and likely reflected ancillary demand from a hot housing market. Sales were up 41% year over year in November for sporting goods and recreation shops. The steepest declines were in clothing stores, which fell 13%. Vehicle sales slipped after a strong October.
Year-to-date retail spending rose 1.6%, and, excluding motor vehicle sales and gasoline, was up a whopping 6.5%, pointing to strong core demand. Households have re-allocated spending from restaurants and recreation towards higher food and beverage, electronics and building materials sales. Primary losers for 2020 were clothing retailers and gas stations, with sales down a quarter.
B.C. housing starts ended 2020 on a strong note, according to the latest Canada Mortgage and Housing Corp. data. Despite the omission of Kelowna data due to COVID-19-related effects on collection, urban B.C. housing starts came in at an annualized pace of 39,688 units, which was down from a robust 44,455 units in November on fewer apartment starts. However, this was still the second-highest monthly pace for 2020.
Metro Vancouver contributed to the decline, falling from an annualized pace of 33,052 units in November to 26,187 units while Victoria and Abbotsford-Mission provided partial offsets. •
Bryan Yu is chief economist at Central 1 Credit Union.
