It seems Vancouver residents aren’t dropping dollars on retail spending compared to other major Canadian cities. At least, not in bricks and mortar stores they aren’t. Figures released by Statistics Canada last month reveal that retail sales in metro Vancouver slumped 0.6 per cent to $3.369 billion in May, compared with the same month in 2018.
While the figure may not sound like a huge deal, this contrasts strong retail gains in Canada’s largest cities including Vancouver
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Toronto saw retail sales hit $8.091 billion in May, a figure that had climbed 6 per cent from the same month a year earlier. A contributing factor here could have been the spike in tourism during the Raptors dramatic playoff run (and perhaps even the sales of Raptors gear).
Over in Montreal, however, the city experienced almost as large of an increase as Toronto did, with a 5.2 per cent hike in retail sales for May. Here, retail sales generated $5.477 billion, compared to $5.205 billion in May 2018.
The overall Canadian retail sector experienced a slight 1 per cent increase in May compared to last year; however, B.C.’s retail sales were down 0.1 per cent compared to May 2018.
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According to the Central 1 Credit Union, in particular, retail sales for motor vehicles and parts was down (it declined 2.6 per cent), as were sales of building material, garden equipment and related supplies. Electronics and clothing also took a hit, says the company.
The thing is, it wasn’t just the month of May that saw disappointing retail figures.
Compared to last year, Toronto’s retail sales were up 5.2 per cent to $39,586,715 in the first five months of 2019. In Montreal, these figures were even higher, with retail sales up 7.2 per cent to $26,906,435. On the other hand, Vancouver saw $16,727,930 in sales in the first five months of the year – a figure that was almost 1 per cent less than the same period a year ago.
So, why is this the case?
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While it’s no secret that Toronto has some of the highest rent prices in the country, Vancouver is also obviously known for its sky-high real estate costs and has seen better days with the MLS Home Price Index composite benchmark price for all residential properties hitting $998,700 – a figure that is down 9.6 per cent compared to June 2018.
A decrease in housing sales means fewer people spending on building-related items for renovations, furniture and landscaping items (i.e. fewer trips to places like Home Depot).
“The sharp decline in housing sales volume has been a driving factor of spending declines in related sectors, while lower prices may also be leading to spending belts being tightened,” reads a report from Central 1 Credit Union.
Additionally, it’s reasonable to question whether record-high gas prices could have played a role in the decline in auto sales.
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Interestingly, B.C.’s lull in consumer demand comes at a time when the province is actually experiencing strong labour market conditions and employment growth.
It should be noted that the retail figures don’t capture the rapidly growing online market, which is increasingly blamed for the shuttering of bricks and mortar stores throughout North America.
With so many of B.C.’s residents taking full advantage of the province’s stunning geography by leading active lives, it isn’t entirely unreasonable to assume that shoppers would rather spend their days hiking or on the water than shopping in bricks and mortar shops.
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While it’s too early to tell if the West Coast city’s retail slump will stick around, the retail industry is an influential driver on the provincial economy and was worth almost $86 billion in 2018.
So, the decline – while seemingly meager – is a worthy of attention.
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