Retail sales fell by more than a quarter in April due to the COVID-19 pandemic, but Statistics Canada said Friday they regained some of the lost ground in May.
The agency said retail sales plunged by a record 26.4% to $34.7 billion in April leaving them down 33.6% since physical distancing measures were implemented in mid-March.
However, Statistics Canada said early estimates suggest retail sales rose 19.1% in May.
Economists on average had expected a drop in April of 15.1%, according to financial markets data firm Refinitiv.
Bank of Montreal chief economist Doug Porter said April was cementing its reputation as the worst month for the Canadian economy ever.
“The Canadian economy, and retail trade specifically, looks to have been hit even harder than initially estimated as well as the U.S. economy through the shutdowns,” Porter wrote in a note.
“It’s a long road back from these April lows.”
While essential services like grocery stores remained open, most retailers did not offer in-store shopping in April due to public health restrictions meant to slow the spread of the pandemic.
However, many retailers started or expanded their online presence and curbside pick-up services in response to the closures.
Statistics Canada said online sales surged to a record high, representing 9.5% of the total retail market.
TD Bank economist Ksenia Bushmeneva said while spending is expected to begin to rebound in the coming months, the “where’s and what’s” of consumer spending is likely to differ from the pre-pandemic time.
“As expected, consumers are spending considerably less on travel and lodging, eating out, gasoline and clothing, but considerably more on home renovation and food. Online shopping also continues to rule the day, remaining far more prevalent than it was prior to the health crisis.”
Sales were down in all 11 subsectors in April, while motor vehicle and parts dealers took the largest hit in dollar terms as the sector fell 44.3% for the month.
Sales at food and beverage stores fell 12.7% as supermarkets and other grocery stores saw a drop of 12% compared with March when Canadians stocked up.
Retail sales in volume terms fell a record 25.2% in April, following an 8.2% drop in March, leaving them down 31.3% since the onset of the pandemic