The retail segment will likely see reduced commercial mortgage activity in the near future, should current trends hold.
Recent data from Statistics Canada showed that retail sales dropped by 10% monthly in March to end up at $47 billion, from its $51 billion-level in February.
StatCan said that this was the worst month-over-month decline ever for the sector – and this is only likely to get worse. The agency forecasted that April sales will fall even more dramatically by 15.6% from March.
“It goes without saying that either figure – the one for March or the one for April – would be record-breaking, but that back-to-back declines of this magnitude take us into fully uncharted waters,” according to Derek Holt, Scotiabank’s head of capital markets economics.
Holt said that this will aggravate the woes of the already long-struggling sector, which has not seen an appreciable increase in volumes since Q3 2018.
“COVID-19 made a bad situation exponentially worse,” he told The Financial Post.
Chains have fared a bit better, although not by much.
“People didn’t get out of their home, and if they did, it was to make this big stockup at the grocery store,” said Stéphane Trudel, Couche-Tard SVP of operations for Canada. “So, yeah, we were the only ones open, but the majority of people were at home. So, a big decline in traffic. Sales weren’t as impacted as traffic.”