Retail spending in B.C. rose for a third straight month in July as consumers re-established shopping habits while an active housing market and domestic tourism further lifted spending.
Total sales at bricks-and-mortar stores rose 2.1 per cent from an upward revised June to reach a seasonally adjusted $7.56 billion.
After a decline of 22 per cent from February through April, the monthly sales flow has fully recovered with July’s increase. Sales sat 2.3 per cent above February levels in July. Actual unadjusted retail sales rose 7.8 per cent year over year.
Among store segments, trends were broadly positive. Year-over-year sales accelerated in furnishing and furniture and building materials stores (both up 11.3 per cent), while sales at electronic and appliance stores were up a robust 13.3 per cent, albeit slowing from June. This points to a rise in ancillary spending related to rising home sales, which have surged across the province.
Sales at clothing and footwear stores also firmed following closures in the spring months but remained 16.1 per cent lower than same-month 2019.
Regionally, Vancouver metro area sales lagged behind the rest of the province with a monthly increase of 0.9 per cent and a year-over-year gain of 3.1 per cent. In contrast, spending rose 3.1 per cent from June and nearly 8 per cent year over year elsewhere.
Rebounding retail spending has lifted spending to within 3 per cent of 2019 year-to-date levels and signals a solid recovery in goods spending. That said, overall consumer spending has been softer amid weaker spending on restaurant meals, travel and personal services.
Retail spending growth should further diminish given underlying economic conditions.
Unemployment remains elevated and fiscal income supports to households and businesses are set to decrease. The domestic tourism boost this summer will also wane as families head back to school after the summer, while international tourism remains essentially shuttered and conferences and events are nonexistent.
Multiple listing service home sales continued to surge through August. B.C. sales rose 16 per cent from July to a seasonally adjusted 9,878 units and marked the highest pace of monthly sales since mid-2016.
After an initial decline of 60 per cent from February through April, housing sales have more than bounced back to 45 per cent above pre-pandemic levels.
– Bryan Yu is deputy chief economist at Central 1 Credit Union.
