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Following four years of robust growth, the Canadian economy slowed in 2001 to its weakest pace since 1992. Growth was dragged down by a sharp drop in business investment as companies slashed their spending. The economy also took a hit from economic weakness in the U.S., which entered its first recession in a decade last year.
The retail sector also slowed last year, but the slowdown was relatively mild despite heightened job concerns. Retail sales were bolstered by low interest rates and significant tax cuts, which enhanced consumer spending power. And a strong housing market fed solid sales of home-related merchandise, which cushioned the falloff.
The outlook calls for retail sales growth to improve this year. The sales pace will depend in large part on the health of the job market. If healthy job gains early in 2002 can be sustained, that bodes well for consumer optimism and thus future spending. However, rising interest rates and a softer housing market will dampen any improvement in sales.
Though mild, the retail slowdown intensified the process of consolidation that has been morphing the retail landscape in recent years. Each of the key retail channels is feeling the impact of rising competition from large retailers, many of them foreign-based, who are looking to dominate the market and gobble up weaker players. Retail e-commerce sales should continue to grow quickly as the online population expands and more users become comfortable buying online.
Table of Contents
Table of Contents
Outlook for Canada 1
The Economy 2
Retail Sector 4
Regional Outlook 6
Retail Outlook by Line of Trade 9
Department Stores 10
Drug Stores 10
Furniture & Appliance Stores 11
Supermarkets 11
Men’s Clothing Stores 12
Women’s Clothing Stores 12
Data Appendix 13
Charts
Canadian GDP Growth and Forecast, 1992-2006F 2
Consumer Spending (PCE) Growth and Forecast, 1992-2006F 2
Employment Growth, January 1980-March 2002 3
Core Consumer Prices Growth and Forecast, 1992-2006F 3
Canadian Exchange Rate (US$/C$) January 1990-April 2002 3
Total Retail Sales Growth and Forecast, 1992-2006F 4
Total Retail E-Commerce Sales, 2000, 2001 5
Total Retail Sales for Ontario, 1997-2001 6
Total Retail Sales for Quebec, 1997-2001 6
Total Retail Sales for British Columbia, 1997-2001 7
Department Store Sales Growth and Forecast, 1992-2006F 10
Drug Store Sales Growth and Forecast, 1992-2006F 10
Furniture & Appliance Store Sales Growth and Forecast, 1992-2006F 11
Supermarket Sales Growth and Forecast, 1992-2006F 11
Men’s Clothing Store Sales Growth and Forecast, 1992-2006F 12
Women’s Clothing Store Sales Growth and Forecast, 1992-2006F 12
Canadian Total Retail Sales (2002-2006F) 17
Canadian Department Store Retail Sales 2002-2006F) 18
Canadian Drug Store Retail Sales (2002-2006F) 19
Canadian Furniture & Appliance Store Retail Sales (2002-2006F) 20
Canadian Men’s Clothing Store Retail Sales (2002-2006F) 21
Canadian Supermarket & Grocery Store Retail Sales (2002-2006F) 22
Canadian Women’s Clothing Store Retail Sales (2002-2006F) 23
Canadian Gross Domestic Product (2002-2006F) 26
Canadian Consumer Spending (PCE) (2002-2006F) 27
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