Logo StatCan COVID-19: Data to Insights for a Better Canada Retail e-commerce and COVID-19: How online shopping opened doors while many were closing

by Jason Aston, Owen Vipond, Kyle Virgin, Omar Youssouf

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In March 2020, new measures aimed at slowing the spread of COVID-19 significantly affected how consumers made retail purchases. With businesses closing and changing their in-store operations, and consumers having to physically distance, the option to purchase online became an important alternative to walking into a Canadian retail store. From February to May 2020, total retail sales fell 17.9%. However, retail e-commerce sales nearly doubled (+99.3%), with some retailers relying more on this method of sale.

This study explores the different e-commerce trends observed across industries in the Canadian retail trade sector.Note The data in this paper will be updated to reflect the evolving conditions of the retail trade sector in Canada. These updates will also allow for the impact of this method of sale to be assessed in the longer term, including whether retail e-commerce will return to levels seen before the COVID-19 pandemic.

Retail e-commerce sales soar to all-time high

Retail e-commerce sales reached a record $3.9 billion in May, a 2.3% increase over April and 99.3% increase over February ($2.0 billion). Year over year, e-commerce sales more than doubled—with a 110.8% increase compared with May 2019.

These record gains in e-commerce occurred as total retail sales experienced record declines. The impact of COVID-19 is best highlighted using April data. Retail sales plummeted to $33.9 billion in April, a 29.1% decline from February and a 26.4% decline from April 2019. While e-commerce saw a 63.8% monthly increase in April, in-store sales dropped 25.3% (Chart 1). In May, total retail sales started to recover, reaching $39.3 billion.

Chart 1 Indexed monthly retail e-commerce sales vs. in-store sales

Data table for Chart 1 
Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1 201601, 201602, 201603, 201604, 201605, 201606, 201607, 201608, 201609, 201610, 201611, 201612, 201701, 201702, 201703, 201704, 201705, 201706, 201707, 201708, 201709, 201710, 201711, 201712, 201801, 201802, 201803, 201804, 201805, 201806, 201807, 201808, 201809, 201810, 201811, 201812, 201901, 201902, 201903, 201904, 201905, 201906, 201907, 201908, 201909, 201910, 201911, 201912, 202001, 202002, 202003, 202004 and 202005, calculated using index (Jan 2016 = 100) units of measure (appearing as column headers).
201601 201602 201603 201604 201605 201606 201607 201608 201609 201610 201611 201612 201701 201702 201703 201704 201705 201706 201707 201708 201709 201710 201711 201712 201801 201802 201803 201804 201805 201806 201807 201808 201809 201810 201811 201812 201901 201902 201903 201904 201905 201906 201907 201908 201909 201910 201911 201912 202001 202002 202003 202004 202005
index (Jan 2016 = 100)
E-commerce 100.0 110.8 105.1 105.8 104.3 105.6 107.8 111.1 120.0 115.6 117.9 165.0 140.9 136.5 142.8 150.8 147.0 147.8 152.9 152.5 151.9 156.1 169.7 165.7 165.7 159.2 163.8 167.6 174.2 178.6 167.9 180.5 172.0 188.0 207.4 177.8 189.1 188.7 204.0 203.4 217.7 232.5 225.8 223.6 228.0 217.7 220.2 244.5 213.6 230.2 273.8 448.6 459.0
In-store 100.0 99.5 96.0 100.1 93.6 96.9 97.6 96.4 99.3 99.4 98.9 103.0 103.0 103.1 103.1 105.1 103.2 105.0 104.9 105.0 105.0 106.9 105.7 106.5 105.2 105.5 107.3 104.5 107.9 108.1 105.9 107.8 108.4 108.4 107.5 108.1 107.9 107.5 108.9 107.7 108.4 107.7 108.8 109.9 107.6 108.4 108.9 108.3 110.2 111.4 97.8 73.0 85.9

Retail e-commerce sales have risen steadily, with the proportion of online sales rising from 2.4% in 2016 to 4.0% in 2019. The month of April highlights the peak of the COVID-19 impact, with the proportion of retail e-commerce sales jumping from 3.8% in April 2019 to a record high of 11.4% in April 2020. In May, as the Canadian retail environment allowed for more in-store purchases, the proportion of retail e-commerce sales was 10.0%.

E-commerce sales increased more among non-essential retailers

All 11 retail trade subsectors with e-commerce sales saw an increase in online sales as a result of COVID-19 (Chart 2). From February to April 2020, only the food and beverage subsector experienced an increase in in-store sales (+3.3%) and a surge in e-commerce (+107.0%). In-store sales declined for general merchandise stores (-15.1%), building material and garden equipment and supplies dealers (-15.8%), and health and personal care stores (-16.1%). These subsectors had relatively moderate declines compared with other brick-and-mortar operations.

In contrast, other retail trade subsectors—such as furniture and home furnishings stores (-69.6%); sporting goods, hobby, book and music stores (-79.0%); and clothing and clothing accessories stores (-84.2%)—saw much sharper declines in in-store sales from February to April 2020. As in-store sales decreased for these subsectors, e-commerce sales increased.

Chart 2 Changes in in-store and e-commerce sales during COVID-19 for selected  subsectors, February to April 2020

Data table for Chart 2 
Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2 In-store and E-commerce, calculated using percent units of measure (appearing as column headers).
In-store E-commerce
percent
Retail trade [44-45] -34.5 94.8
Furniture and home furnishings stores [442] -69.6 191.2
General merchandise stores [452] -15.1 170.1
Sporting goods, hobby, book and music stores [451] -79.0 154.9
Food and beverage stores [445] 3.3 107.0
Clothing and clothing accessories stores [448] -84.2 83.3
Health and personal care stores [446] -16.1 55.6
Building material and garden equipment and supplies dealers [444] -15.8 40.5

Mandated business closures that prevented retailers from making traditional in-store sales resulted in a greater shift toward e-commerce. Meanwhile, food and beverage stores—essential services that were allowed to remain open—saw a 38% increase in grocery sales in the second week of March compared with 2019, and a surge in sales of certain personal care products.Note For these subsectors, the importance of in-store sales is evident since e-commerce was not the only method of sale available, unlike for certain non-essential retailers. In general, the subsectors that had more establishments that were mandated to close (Chart 3) became more reliant on e-commerce.

Chart 3 Average number of  days retail establishments were closed, selected subsectors, March and April 2020

Data table for Chart 3 
Data table for Chart 3
Table summary
This table displays the results of Data table for Chart 3 March and April, calculated using average number of days units of measure (appearing as column headers).
March April
average number of days
Retail trade [44-45] 5 8
Furniture and home furnishings stores [442] 9 13
Building material and garden equipment and supplies dealers [444] 3 4
Food and beverage stores [445] 1 2
Health and personal care stores [446] 1 2
Clothing and clothing accessories stores [448] 13 20
Sporting goods, hobby, book and music stores [451] 10 17
General merchandise stores [452] 1 2

Long-term impact

Will the COVID-19 pandemic have a lasting impact on the retail trade sector? Small businesses are increasingly turning to e-commerce platforms, and are using these platforms in innovative ways.Note The degree to which Canadians continue to choose e-commerce purchasing options or return to traditional purchasing methods has the potential to change the structure of the retail trade industry in Canada. Clearly, the retail landscape will evolve.

Note to readers

All data in this paper are seasonally adjusted and are expressed in current dollars, unless otherwise noted.

A standard usage of the North American Industry Classification System (NAICS) groups all internet-only retailers together under NAICS code 45411, regardless of their associated retail subsector. For this study, to determine e-commerce sales by subsector, establishments classified under NAICS 45411 were combined with their brick-and-mortar retail NAICS code. In addition, establishments with no related brick-and-mortar retail NAICS code were assigned a new code based on the products they sell. This results in different figures when comparing the data in this paper with data from Statistics Canada’s Monthly Retail Trade releases.

Goods and services sold to Canadian consumers online from legal entities operating in foreign countries are not included in Canadian retail sales figures.


Appendix A
Annual retail sales by method of sale (% of total)
Table summary
This table displays the results of Annual retail sales by method of sale (% of total). The information is grouped by NAICS (appearing as row headers), Method, 2016 (%), 2017 (%), 2018 (%), 2019 (%) and 2020 (Jan. to May) (%) (appearing as column headers).
NAICS Method 2016 2017 2018 2019 2020 (Jan. to May)
%
Retail trade [44-45] In store 97.6 97.1 96.7 96.0 93.4
E-commerce 2.4 2.9 3.3 4.0 6.6
Motor vehicle and parts dealers [441] In store 99.6 99.4 99.1 98.5 98.2
E-commerce 0.4 0.6 0.9 1.5 1.8
Furniture and home furnishings stores [442] In store 97.8 96.9 95.3 93.4 83.6
E-commerce 2.2 3.1 4.7 6.6 16.4
Electronics and appliance stores [443] In store 83.0 81.7 79.2 71.0 56.5
E-commerce 17.0 18.3 20.8 29.0 43.5
Building material and garden equipment and supplies dealers [444] In store 99.3 99.0 99.0 98.8 98.4
E-commerce 0.7 1.0 1.0 1.2 1.6
Food and beverage stores [445] In store 99.7 99.5 99.4 99.3 98.8
E-commerce 0.3 0.5 0.6 0.7 1.2
Health and personal care stores [446] In store 98.4 96.4 96.3 94.5 92.7
E-commerce 1.6 3.6 3.7 5.5 7.3
Clothing and clothing accessories stores [448] In store 91.6 92.0 91.1 89.4 76.4
E-commerce 8.4 8.0 8.9 10.6 23.6
Sporting goods, hobby, book and music stores [451] In store 93.5 91.1 89.5 87.7 73.0
E-commerce 6.5 8.9 10.5 12.3 27.0
General merchandise stores [452] In store 97.5 97.4 97.1 97.1 95.0
E-commerce 2.5 2.6 2.9 2.9 5.0
Miscellaneous store retailers [453] In store 87.5 82.6 83.6 85.4 80.4
E-commerce 12.5 17.4 16.4 14.6 19.6
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