Even as another significant retail chain in Canada announces closure of all its stores, one statistic says retail sales in the country are rebounding, but another report says consumer confidence in the economy is stagnant.
Mendocino is a women’s fashion chain with some 28 stores around the greater Toronto area. In filing the insolvency notice of intent, the company said, “As a result of challenges resulting from the pandemic, the Company recently made the very difficult decision to discontinue all or substantially all of their stores and focus on an e-commerce model”. Survival through online sales alone is no guarantee a report last year by the International Council of Shopping Centres noted that physical stores help drive online sales. There is no indication of the number of jobs that will be permanently lost with the closure announcement.
Meanwhile Statistics Canada, the government statistics agency, says retail sales rebounded in May by almost 19% as a few businesses began to reopen from an April shutdown due to COVID-19. Car and auto parts dealers led the way, but sales were up in every province and in almost every sector, including clothing and general merchandise. The only sector showing a decline was food and beverage, down substantially at over 23 per cent.
Preliminary estimates from StatsCan indicate sales in June will be up over 24 per cent, roughly equal to the record decline of 24.1 per cent in April
However, in spite of what seems like good news for the economy, StatsCan notes that retal sales are still some 20 per cent below February levels.
Even as consumers appear to be starting to shop once again, a survey of consumer confidence in the economy was lackluster. In a Bloomberg/Nanos survey, more than half of Canadians (59%) believe the worst is yet to come for the economy. Even though many businesses and industries are gearing back up, some 16 per cent said they were unsure or somewhat unsure about the security of their jobs. Only 14 per cent said they were better off financially than they were a year ago. In its June report, the Conference Board of Canada, a non-profit think tank, still predicted an 8.2 per cent reduction in the economy for the year, the worst on record.