Statistics Canada
Symbol of the Government of Canada

Retail and Wholesale Trade

Warning View the most recent version.

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Buying and selling goods—manufacturers and importers selling to wholesalers, wholesalers selling to retailers and retailers to consumers—is a big part of the Canadian economy. Combined, retail and wholesale trade employ the largest number of workers in the country.

In 2005, some 1.7 million people worked in retail, comprising 12% of all employment, while 607,100 people worked in wholesale. That year, retail and wholesale each generated about 6% of Canada’s economy.

But these industries are vulnerable to economic shifts. Temporary declines and increases in revenue are sometimes also due to changing wholesale prices of items, such as gasoline.

Retail sales are often seasonal—clothing sales can fall in October after the back-to-school rush, while December revenues in many categories increase because of holiday gift-buying.

Retail trade

From 2004 to 2005, retail revenues on the whole rose steadily in Canada. In 2005, retailers—including both brick-and-mortar and non-store retailers, such as those selling exclusively through e-commerce, mail order or catalogues—posted operating revenues of $403.6 billion, up 5% from the year before. Consumers opened their wallets wider in part because of higher gasoline prices and more purchases at home furnishing stores.

Alberta led the country in retail sales gains from 2000 to 2005, thanks to the energy boom. Growth there was nearly double that of the next province, British Columbia, where retailers profited from a hot housing market.

The total gross margin—the difference between total operating revenues and the cost of goods—for all store retailers rose 6% in 2005. The highest gains in margins were in furniture stores (13% growth over 2004), home furnishing stores (10%) and gasoline stations (10%).

Another measure of a retailer’s health is its operating profit—total operating revenues minus total operating expenses and the cost of goods sold. In 2005, operating profits for store retailers rose 6% from the year before, while they increased 10% for non-store retailers.

Other ways to shop

Gone are the days when your only retail choice was to walk into a store, pay cash and leave with an item. Today, Canadians have many shopping choices, as the Internet continues to change the face of retail. Surveys of retailers do not give a breakdown for online sales, nor do they account for people who browse online for product information but then purchase an item on the phone, by mail or in a store. Yet we do know a bit about consumers’ online shopping habits from the Canadian Internet Use Survey conducted in November 2005.

In the 12 months prior to November 2005, some seven million Canadians aged 18 and older ordered $7.9 billion worth of goods and services for personal use online—this includes booking travel arrangements and concert tickets, which are not considered retail sales. Nearly two-thirds (63%) of the value of these Internet orders went to suppliers based in Canada.

The most popular online retail items are books, magazines and online newspapers, bought by 35% of Canadian Internet shoppers, followed by clothing, jewellery and accessories (25%), computer software (20%), music (16%), consumer electronics (16%), and videos and DVDs (13%).

Even how we pay for things in traditional stores is changing. The proportion of retailers offering gift cards that can be redeemed for merchandise is ballooning. From December 2003 to December 2005, the proportion of stores owned by large retailers that offered gift cards rose 29 percentage points to 82%. By the 2005 holiday shopping season, all the major home electronics and appliance retailers in Canada offered gift cards, while 79% of large clothing stores (including shoe stores) and 70% of supermarkets sold gift cards.

Consumers enjoy the convenience of giving and receiving gift cards, while retailers like the cards because they can build store loyalty and increase sales, especially in January—since most gift card recipients buy more in their stores than the face value of the cards.

Wholesale trade

Most consumers do not see wholesalers, who distribute goods to retailers and other businesses, but they are the key link between manufacturers and the marketplace. Wholesalers’ operating revenues grew 8% in 2005 from the year before, to $626.5 billion.

The largest gains were in the petroleum industry—revenues climbed 25% from the year before, mainly because of price increases for crude oil—in metal products (up 17%) and in machinery and equipment wholesalers (up 15%). In 2005, 5 of 17 industry groups saw revenues decline: farm products, alcohol and tobacco, motor vehicles, lumber and millwork, and agents and brokers.

Wholesale prices of goods also affect sales figures for this industry and are subject to economic factors. For example, the rising Canadian dollar has lowered prices on some goods coming from the United States. In 2005, demand for imported products continued to grow, which is important to the industry—roughly 40% of all imports are brought into Canada through wholesalers.

The gross margin as a proportion of operating revenue for all wholesalers decreased one percentage point to 17% in 2005. Operating profit margins as a percentage of total operating revenue also declined one percentage point in 2005, to 5%.