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What you need to know about COVID-19: August 10, 2020
Atlantic bubble helpful, especially for Maritime provinces closer in proximity to each other
Statistics Canada data shows after a rough April, retail sales made some gains for the month of May. But a deeper look at the numbers suggest many retail sectors in Atlantic Canada still have a long way to go to reach sales levels they’re historically used to.
According to seasonally adjusted data from Statistics Canada, retail sales in the region were up 21.1 per cent in May compared to the previous month, climbing from $2.5 billion to over $3 billion. April was a particularly down month though, with retail sales declining 21.8 per cent compared to the previous month of March, when retail sales for the four Atlantic provinces totalled over $3.2 billion.
“It’s very encouraging,” said Jim Cormier, Atlantic director for the Retail Council of Canada. “I don’t want to put a negative spin on it. I just don’t want people to go away thinking the retail sector is OK now, because they’re not.”
While the increase from month-to-month is real, Cormier noted the level of activity changes considerably if you remove some of the better performing sub-sectors like groceries and motor vehicles.
“If you were an apparel retailer during that time, if you were selling sports equipment, if you were selling jewellery, chances are you’re still not doing that well,” he said. “Everybody is very optimistic that the numbers are going in the right direction. Everybody is optimistic over the Atlantic bubble and everybody has their fingers crossed that will continue ... But we want everyone to be realistic in understanding these numbers are nowhere near where they were in April and May of 2019. And if you take some of those retail industries out of the retail numbers, it’s not that rosy of a picture ... Small, medium and large, they’re still hurting.”
When looking at year-over-year data, the picture becomes clearer as to how retail sales are faring as COVID-19 causes unprecedented complications. Total retail sales for Atlantic Canada in May of this year were down 9.2 per cent from the same month in 2019. Kevin MacLean, an economist with the Atlantic Provinces Economic Council, noted this figure looks pretty good compared to the year-over-year decline for April, which was a 23 per cent drop from 2019 to 2020.
“We’re seeing a bit of an improvement there, which can be expected as we see reopenings, more so in provinces like New Brunswick and P.E.I., whereas Newfoundland and Nova Scotia were a little bit later to reopen,” said MacLean. “We would likely expect this trend to continue into June, not only as stores continue to reopen, but also in line with what we already know in the employment and hours of work data, that jobs are slowly but surely coming back.”
In Canada, approximately 23 per cent of all retail stores reported being closed for a period of time in May, with the average shutdown amounting to five business days. Nationally, 10 out of the 11 retail sub-sectors reported increased sales activity in May, with only food and beverage down from the previous month (-2.0 per cent). From March to April, food and beverage sales experienced a record-high increase of 23.2 per cent.
The region’s month-to-month performance was above the national average of 18.7 per cent, with Newfoundland and Labrador recording the biggest increase (25.5 per cent) and Prince Edward Island the lowest (14.9 per cent). Year-over-year for May, Nova Scotia had the sharpest decline (-14.7 per cent) and Newfoundland and Labrador the smallest (-4.1 per cent).
“In May, we’re seeing a similar narrative where Newfoundland, New Brunswick and P.E.I. are recovering fairly quickly it would seem, as they were able to contain COVID relatively quickly,” MacLean said. “Meanwhile, Nova Scotia, in particular the Halifax region, struggled with COVID for longer, and so through May, it’s recovery is slightly less pronounced than in the other three provinces.”
Nationally, retail sales declined 18.4 per cent from May 2019 to May 2020. While the full numbers have not been compiled yet, Statistics Canada said early estimates suggest the increase from May to June could be 24.5 per cent, which would knock retail sales up to $52 billion. That would result in a slight year-over-year increase compared to June 2019 of 2.0 per cent.
As of July 3, the Atlantic bubble allowed for seamless travel between the four provinces without needing to self-quarantine upon entry. Cormier believes this will be particularly helpful for retail hubs in the Atlantic provinces and especially within the Maritimes, given those three provinces are in closer proximity to each other and have easier entry points.
“I do know folks in Moncton and Halifax — and Charlottetown to a lesser extent — have been very excited with the Atlantic bubble,” he said. “Especially in an area like Moncton, just as an example, where they’re geographically located in a very strategic spot. They, for years, have relied on shoppers coming from Prince Edward Island, from northern Nova Scotia, from northern New Brunswick, travelling for a day of shopping or perhaps a weekend of shopping. They went four months where they weren’t getting that.”
MacLean also views the bubble as a positive development for the retail sector, though he would consider the biggest beneficiaries to be non-retail businesses like restaurants and accommodations. Local grocery stores. shops selling branded merchandise and gasoline pumps will likely be among the retail businesses likely to benefit, MacLean said.
“The Atlantic bubble provides an opportunity there where if we all try our best to turn our tourism dollars inward for the summer, it could go a long way in mitigating some of these adverse impacts that we’re seeing,” he said.
To keep local business in the retail sector afloat, Cormier stressed the importance of going out and supporting those stores.
“The apparel sector was hit the hardest, and I think that’s going to continue,” he said. “But they’re like everybody else, where they’re confident now that people are getting more comfortable in getting back to brick and mortar retail stores that they can still provide a safe and enjoyable retail experience.
“We encourage people ... to get out and support retailers, whether they’re small, medium or large. Support the ones in your community. They pay taxes, they employ people, they donate to different charitable cause and local sports teams in your communities. They do need your help.”