When Disney announced recently that it was closing its huge store in Burnaby’s Metropolis at Metrotown, the news shouldn’t have come as a surprise.
Retail stores have been hurting for years – well before COVID-19 struck.
Look at Forever 21. The fashion company went into the insolvency process way back in 2019 as many customers stopped buying clothing in person. Le Chateau was also hurting long before COVID-19 – COVID-19 just was the final nail as the company closed its Metropolis store recently.
COVID-19 has been devastating for businesses, especially retail and restaurants. Some have done well with online sales, such as Aritzia (which has even been able to buy another clothing company), but others haven’t found the secret sauce to ride things out.
Things were improving at the end of 2020 and into early 2021.
And then the third wave came and we’re seeing just how bad it was.
Canadian retail sales in April posted their largest drop since the start of the pandemic as governments moved to deal with its third wave.
Statistics Canada said Wednesday retail sales fell 5.7 per cent to $54.8 billion in April, the largest decline since April 2020 during the pandemic's first wave. Sales at clothing and clothing accessories stores plunged 28.6 per cent in April, while general merchandise stores dropped 8.1 per cent.
The agency also said its preliminary estimate suggested an additional drop of 3.2 per cent for May, but cautioned the figure would be revised.
TD Bank economist Ksenia Bushmeneva said third wave-related restrictions on non-essential and in-person shopping held back retail sales in April as expected.
"In addition to restrictions, auto dealers were also impacted by the shortage of microchips, limiting their inventory and weighing on sales that month," Bushmeneva wrote in a report.
"While the microchip shortage may persist for some time, other headwinds will ease. With the vaccination campaign gathering speed and most provinces gradually lifting restrictions in June, consumer spending is on track to rebound strongly in the second half of the year."
The drop in April sales was concentrated in retailers deemed "non-essential" as sales fell in nine of 11 subsectors.
Core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — fell 7.6 per cent.
Statistics Canada said sales at building material and garden equipment and supplies dealers fell 10.4 per cent, their first drop in nine months.
Meanwhile, sales at motor vehicle and parts dealers and gasoline stations also fell for the first time in four months
Sales at motor vehicle and parts dealers fell by 1.4 per cent, while sales at gasoline stations fell 4.1 per cent in April.
Retail sales in volume terms fell 5.6 per cent in April.
- With additional reporting by the Canadian Press
