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Shopping outside the box
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We all do some shopping outside the four walls of a retail store. In 2005, Canadians bought $12.8 billion worth of goods and services from ‘non-store retailers’—these include mail-order, online catalogues, door-to-door sales, TV infomercials and vending machines. Non-store retailers account for just 3% of retail sales in Canada, but this sector is enjoying strong growth.
In 2005, these retailers posted 8% sales growth from the year before, compared with 5% for brick-and-mortar stores. Fuel dealers accounted for 51% of non-store operating revenues—the lion’s share in 2005. Fuel dealers’ revenues surged 18% and their profits rose 8%.
Electronic shopping and mail-order businesses are the second largest group—they generated 31% of non-store revenues in 2005. Their sales growth was less than 1% above 2004, but some of these retailers are eroding the sales of their brick-and-mortar competitors. For example, computer and software stores struggled in 2005; revenue rose just 2% from 2004. But computer software sales by electronic shopping and mail-order establishments soared 121%.
Vending machine operators and direct selling businesses saw sales drop 4% and 5%, respectively in 2005. However, lower revenues were more than offset by lower operating expenses. As a result, these two groups saw the strongest profit growth—22% for vending machine operators and 30% for direct sellers.
Of the products sold by non-store retailers, services, such as meals and lunches, repairs, rental and leasing, saw the sharpest sales growth, up 20% to $376.8 million in 2005.
