economy
THE (RE)TAIL-END OF A PROLONGED CONSUMER SPENDING SPLURGE? The bricks and mortar retail model has recently been facing challenges on multiple fronts, from online shopping to lower home values.
While it has long been established that online retailing is taking an ever-larger piece of the consumer spending pie, it continues to be debated whether digital storefronts will be the death knell of physical ones. When looking at retail spending per capita in major markets in Canada—and especially in Metro Vancouver—it seems clear that the retailspendingbonanzathatcharacterizedthe post-2009 period has been put in a holding pattern, at least since mid-2017.
Because retail spending data do not account for sales to online merchants, the increased propensity of consumers to shop on the internet seems a plausible explanation for slowing per capita spending values. However, through the wealth effect, softened home values also play a role, discouraging spending at the margin. With Vancouver’s housing market clearly following a new (upward) trajectory, do not be surprised if the retail spending data tell a different story in the months to come.
PER CAPITA RETAIL SALES CONTINUE TO FLAG
$1,700
$1,600
$1,482 $1,487 $1,474
$1,500
$1,400
$1,300
$1,200
$1,100
$1,000
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 2019
MONTREAL
TORONTO
VANCOUVER
DATA: MONTHLY RETAIL SALES VALUES PER 1,000 RESIDENTS AGED 15+, SEASONALLY-ADJUSTED
SOURCE: LABOUR FORCE SURVEY & RETAIL TRADE SURVEY, STATISTICS CANADA
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