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Annual wholesale trade, 2019

Released: 2021-03-30

The operating revenue of Canadian wholesalers rose 2.0% in 2019, reaching an all-time high of $1.1 trillion. Seven of the nine wholesale subsectors saw increases in revenue.

The cost of goods sold, which represents the cost of acquiring goods for resale, grew in line with revenue to reach $947.7 billion in 2019.

As a result, gross margins for wholesalers (the difference between total operating revenue and the cost of goods sold, expressed as a percentage of total operating revenue) were unchanged, at 16.8%.

Total operating expenses, which include labour remuneration, were up 4.5% to $136.9 billion. Total operating expenses increased in all subsectors.

Overall, the operating profits of wholesalers as a percentage of total operating revenue decreased from 5.1% in 2018 to 4.8% in 2019, as revenue growth failed to keep up with rising expenses.

Wholesale revenue up in all but two subsectors

Among wholesale merchants, the largest increase in operating revenue was observed in the motor vehicle and motor vehicle parts and accessories subsector, up 6.5% to $144.2 billion in 2019, as both imports and exports of vehicles rose compared with 2018.

Wholesalers of petroleum and petroleum products accounted for the largest proportion (24.8%) of operating revenue in the wholesale trade sector in 2019, down from 25.5% in 2018.

In dollar terms, the second-largest increase in revenue was observed in the food, beverage and tobacco subsector, up 4.6% to $149.9 billion in 2019. This subsector now includes the cannabis industry. Most of the gain in this subsector was attributable to the food industry, which saw its revenue rise 4.4% to $132.8 billion. The addition of the cannabis industry to this subsector also contributed to part of the increase.

The only subsectors to see their operating revenue decline were the petroleum and petroleum product subsector and the building material and supplies subsector. Petroleum and petroleum product wholesalers saw their revenue decrease by 0.9% to $282.8 billion, as lower crude oil prices were only partly offset by higher production. Meanwhile, the revenue of building material and supplies wholesalers was down 2.9% to $107.3 billion, as wholesalers of lumber, millwork, hardware and other building supplies saw their revenue decline by 6.8% to $52.3 billion.

Gross margins of wholesalers are unchanged

Expressed as a percentage of total operating revenue, gross margins were unchanged from 2018 levels, at 16.8%. Higher margins were reported in five subsectors, and lower margins were reported in four.

Gross margins varied widely among subsectors, depending on the cost structure of the different types of wholesalers. Among wholesale merchants, the lowest gross margin was posted by wholesalers of petroleum and petroleum products (3.9%). The highest gross margin was in the machinery, equipment and supplies subsector (26.9%), followed by the personal and household goods subsector (24.9% in 2019, down from 25.5% in 2018).

Operating profits decrease

In 2019, five of the nine subsectors posted annual decreases in their operating profits as a percentage of total operating revenue. Overall, operating profits decreased from 5.1% in 2018 to 4.8% in 2019.

Among wholesale merchants, personal and household goods wholesalers posted the steepest decrease in their operating profits, declining from 6.8% in 2018 to 5.8% in 2019. All five industry groups within this subsector saw their profits decrease as a percentage of revenue.

Motor vehicle and motor vehicle parts and accessories wholesalers posted the largest increase in operating profits among wholesale merchants, up from 4.3% in 2018 to 4.6% in 2019, as revenue grew faster than total operating expenses.

Wholesale revenue up in most provinces

In 2019, six provinces and two territories reported higher wholesale operating revenue compared with 2018. Overall, operating revenue in Canada increased by $22.5 billion in 2019. Growth was driven primarily by the two central provinces; operating revenue was up $15.3 billion in Ontario and $7.0 billion in Quebec.

Overall, wholesale operating revenue in Ontario remained the highest among all the provinces, increasing 3.5% to $447.7 billion. Seven of nine subsectors posted growth from 2018 to 2019, led by the motor vehicle and motor vehicle parts and accessories subsector, which saw revenue increase 8.7% to $104.5 billion. The only operating revenue declines in Ontario were observed in the petroleum and petroleum product subsector (-7.8%) and the building material and supplies subsector (-4.2%).

Operating profits in Ontario were 5.8% in 2019, down slightly from 6.0% in 2018. From 2018 to 2019, the cost of goods sold by wholesalers in Ontario increased by 3.5% to $354.1 billion. Meanwhile, total operating expenses for Ontario wholesalers were up 5.4% annually to $67.8 billion in 2019.

In 2019, wholesalers in Alberta reported a 0.3% annual decline in operating revenue to $306.2 billion. The decrease was mainly attributable to the petroleum and petroleum product subsector (-1.2%), which accounted for over two-thirds of wholesalers' operating revenue in the province. Five of nine wholesale subsectors in Alberta saw their revenue increase in 2019. The second-largest wholesale subsector in Alberta was machinery, equipment and supplies, which posted a slight decline in operating revenue to $27.3 billion.

Operating profits in Alberta were 3.5% in 2019, down from 4.1% in 2018, as seven subsectors showed declining profits expressed as a percentage of revenue. From 2018 to 2019, the cost of goods sold by wholesalers in Alberta increased by 0.3% to $278.0 billion. Meanwhile, total operating expenses for Alberta wholesalers were up 2.0% annually to $17.5 billion in 2019.

Wholesalers in Quebec posted the third-highest provincial total operating revenue in 2019, at $175.6 billion, up from $168.6 billion in 2018. All nine wholesale subsectors in Quebec posted higher operating revenue in 2019 compared with 2018.

Operating profits in Quebec were 5.5% in 2019, down from 2018. From 2018 to 2019, the cost of goods sold by wholesalers in Quebec increased by 4.1% to $138.6 billion. Meanwhile, total operating expenses for Quebec wholesalers were up 5.7% annually to $27.4 billion in 2019.

Cannabis

With this release, data on cannabis are now available for the first time.

In 2019, cannabis wholesalers generated $699.2 million in total operating revenue. The cost of goods sold was $507.8 million, resulting in a gross margin of 27.4%. Total operating expenses amounted to $131.3 million. In the first full year after the legalization of cannabis for recreational purposes, wholesalers earned a profit equal to 8.6% of total operating revenue.

Cannabis distribution rules vary from province to province—as a result, cannabis wholesale activities are concentrated in Ontario and the provinces to the west. Ontario accounted for the largest share of the Canadian market, with $300.7 million in revenue. Alberta came in second, posting $215.9 million in operating revenue.

Wholesale trade commodities

Wholesalers across Canada buy and sell a wide variety of commodities, ranging from petroleum products, motor vehicles, pharmaceuticals, wood products and clothing to a large selection of food products.

The Annual Wholesale Trade Survey measures the sales and costs of goods sold for these and other products, classifying them according to the North American Product Classification System.

In 2019, Canadian wholesalers sold over $1.1 trillion worth of commodities. Compared with 2018, sales increased 2.0%. Higher sales were seen in 37 of 60 commodity subclasses in 2019 compared with 2018. Six additional commodity subclasses are now available for 2019 to account for cannabis products. Total sales of cannabis products reached $675.5 million.

In 2019, 39 of 60 commodity subclasses saw their cost of goods sold increase, while the rest posted declines. The six new commodity subclasses for cannabis accounted for $532.0 million in cost of goods sold.

In dollar terms, automobiles, light trucks, and vans led the way in sales growth, up $6.8 billion to $86.5 billion in 2019. The cost of goods sold increased $4.2 billion to $78.2 billion.

The top 5 commodity subclasses accounted for 48.3% of all sales (excluding cannabis) in 2019, unchanged from 2018. These commodity subclasses cover a wide variety of goods distributed by Canadian wholesalers, from essentials such as petroleum, food and pharmaceuticals to durable goods such as motor vehicles and farm equipment.

In 2019, the largest commodity subclass in dollar terms was petroleum and petroleum products, comprising a 25.3% share of total wholesale sales (excluding cannabis), down from 26.4% in 2018. Sales in this subclass declined by $6.5 billion in 2019 compared with 2018.




  Note to readers

Data for 2018 have been revised.

This survey collects data from businesses based on their fiscal year. For the year 2019, this can include data for the period ending as late as March 31, 2020. This means that these results do not fully reflect the impact of the COVID-19 pandemic on businesses. Future releases from this survey will provide more comprehensive information on this impact. In the meantime, users can obtain information from the Monthly Wholesale Trade Survey or other Statistics Canada programs.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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