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COVID-19 pushed Canadian retail sales to their biggest ever plunge in March – CBC.ca

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Widespread lockdowns due to COVID-19 across the country pushed Canadian retail sales down by 10 per cent in March, the biggest plunge on record.

Statistics Canada reported Friday that about 40 per cent of Canadian retailers closed their doors in March, as government lockdowns and physical distancing requirements set in.

March’s plunge was more than twice as bad as the previous record of 4.5 per cent, set in February 1998.

The data agency says April’s preliminary numbers suggest that month’s data are likely to be even worse, down 15 per cent from March’s already low level, but the numbers released Friday show just how bad things got in just the first two weeks of lockdown.

Overall, Canadians spent just $47 billion at retailers in March. That’s the worst month since 2016.

Just about every type of retailer saw sales plummet during the month, but those deemed non-essential bore the brunt, including:

  • Clothing stores, down 51 per cent.
  • Motor vehicle and parts dealers, down 35 per cent.
  • Furniture and home furnishings, down 24 per cent.
  • Hobby, book and music stores, down 23 per cent.
  • Gas stations, down 19 per cent.

There were a few bright spots, namely grocery stores that saw booming business as Canadians stocked up to shelter in place. Food and beverage sales were up 22 per cent, while general merchandise stores had their best month ever, with sales up 6.4 per cent.

Sales at health and personal care stores rose 4.6 per cent, also to their highest level on record. Cannabis sales rose 19 per cent.

Another bright spot was the growth in online retailers, as Canadians spent $2.2 billion online in March. That’s 40 per cent higher than it was in the same month last year.

‘Gradual normalization in sales’ expected in May: analyst 

Economist Benjamin Reitzes at Bank of Montreal noted that online selling was actually probably even higher, since sales at U.S. retailer Amazon aren’t included in Friday’s numbers — even if the sale was made on the Canadian website, Amazon.ca.

“The record drop in March retail sales comes as a surprise to no one [and] April will be more of the same,” Reitzes said. “How quickly we rebound is the more pressing question at this point.”

TD Bank economist Omar Adbelrahman says he thinks the retail sales numbers should start to rebound a little once data from the current month of May come out. Massive government bailout packages for laid-off workers should give people money to buy things, he said, and a loosening of restrictions means more stores will be open to sell to them.

“With some provincial economies starting a gradual reopening process for some retail stores, we expect some gradual normalization in sales from May onwards,” he said.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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