Alberta’s retail sector was off to a good start in January.
After adjusting for seasonal variation, total retail sales in the province jumped 1.6 per cent in January and were up by 2.1 per cent compared to a year earlier, ATB Financial’s Economics and Research team state in a release.
However, with everything that has happened over the last few weeks, January seems like a million years ago.
When the retail sales figures for February arrive (which don’t come out until April 21), the effects of the COVID-19 epidemic still won’t be apparent. Toilet paper didn’t start flying off the shelves until early March and “social distancing” was not really a thing in Alberta until a week or two ago.
So what can we expect on the retail front? Many people are staying home, lots of stores are closed, and consumer confidence has been shaken. Given this, the overall effect will be negative and act to push down retail sales in the province, though by how much remains to be seen, ATB Financial’s Economics and Research team states.
With that said, some retailers will almost certainly see a spike in sales. At the top of this list are grocery stores, which have been unusually busy with Albertans stocking up in preparation for long stretches at home, in anticipation of potential shortages and to make up for not eating out as much. A rise is also expected in spending at health and personal care stores for similar reasons.
It’s hard to track, but sales of things like deep freezers and water dispensers may also jump in March.
From car lots to clothing stores, the rest of the retail sector will likely be hit hard going forward. Sales at gas stations will fall dramatically due to both reduced demand and a sharp drop in prices. Although not included in the retail sector, restaurant and bar sales (even taking into account a potential rise in take-out and delivery revenue) are also likely to suffer.
The key variable in all this (other than the oil price war and its impact on gasoline prices) will be the length of time required to contain the COVID-19 epidemic.