Paul Young CPA, CGA presented a report on retail sales in Canada for July 2019. The report discussed retail sales by segment and province. It also covered topics like e-commerce, alcohol distribution, retail risks, augmented reality applications, and retail closures and bankruptcies. For 2019, retail sales rebounded slightly in February after declines in previous months. Consumer spending is expected to grow slowly while carbon taxation may impact consumer prices. Retailers will focus on expanding e-commerce and improving customer experience through technology.

1. Retail Sales – Canada –
July 2019
Paul Young CPA, CGA
September 20, 2019

2. Paul Young - Bio
• CPA, CGA
• Financial Solutions
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
• SME – Business Strategy and Restructuring
Contact information:
Paul_Young_CGA@Hotmail.com

3. Introductory
• Retail sales is key sector as retail sales account for ¼ of GDP
• Retail prices are under pressure due to many factors like carbon tax
or tariffs or other factors.

4. Agenda
• Total Retail Sales by Segment
• Total Retail Sales by Province
• Ecommerce
• Alcohol distribution
• Retail / Supply Chain Risk Factors
• Augment Reality and Retail
• Retail closures and bankruptcies
• What happen in 2018
• Retail and Technology
• What’s next

5. Introduction
• Sales in the retail trade sector were essentially unchanged in June.
Stronger sales across most subsectors were offset by lower sales at motor
vehicle and parts dealers and gasoline stations. Excluding sales in these
two subsectors, monthly retail sales advanced 1.7%.
• Sales were down in 4 of 11 subsectors, representing 48% of retail trade.
• After removing the effects of price changes, retail sales in volume terms
increased 0.4%.
• Retail sales for the second quarter increased 1.2%, while retail volumes
edged up 0.1%.
Source - https://www150.statcan.gc.ca/n1/daily-
quotidien/190823/dq190823a-eng.htm

6. Retail Sales by Segment
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190920/t002a-eng.htm or https://economics.bmo.com/en/publications/detail/cec579f4-afa2-48d4-b1ed-844a1e9af840/

7. Retail Sales by Province
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190920/t002a-eng.htm or https://economics.bmo.com/en/publications/detail/cec579f4-afa2-48d4-b1ed-844a1e9af840/

8. E-Commerce
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190920/t002a-eng.htm or https://economics.bmo.com/en/publications/detail/cec579f4-afa2-48d4-b1ed-844a1e9af840/

9. Employment vs Sales
Source – Stats Canada

10. Ontario Alcohol Distribution
Brewers Retail will still exist, but their retail and distribution model will be changed. This was never about beer being sold at other locations, but the
protection of union jobs.
1. Brewers Retail already charges all locations with fees as part of distribution of alcohol - https://o.canada.com/business/how-much-price-gouging-at-the-
beer-store-costs-bars-and-restaurants
2. Inconvenient Truth - https://torontosun.com/opinion/columnists/opinion-the-inconvenient-truth-about-the-beer-store-
monopoly?fbclid=IwAR1hpGrwtq5FrmUcU3bQt5u1pdOYduLACDjeomGGENxFlaBksmhafZwuEnI
3. Propaganda https://www.canadianmanufacturing.com/operations/beer-insiders-fuelling-online-criticism-of-tory-government-tweets-fedeli-233797/
4. Brewers Retail F/S - http://www.thebeerstore.ca/about-us/operational-report
5. Craft Breweries https://globalnews.ca/news/4381583/cost-produce-craft-beer/ -
6. Govt has been looking distribution and retailing of beer for a while - https://www.ontario.ca/page/modernizing-beer-retailing-and-distribution
7. Brewer Retail own a monopoly which means they will fight to give it up - https://torontolife.com/city/toronto-politics/hard-ontario-start-allowing-beer-
sales-convenience-stores
8. ”Howard continues laying out the Beer Store’s case: “The fact that beer prices will be higher.” People pay for convenience when they shop at any location
that is why stores are called Convenient Stores https://torontosun.com/opinion/columnists/agar-beer-stores-facts-dont-stand-up
9. Brewers Retail has done little to stock microbrews, why? https://www.canadianmanufacturing.com/sales-and-marketing/beer-canada-releases-2018-
industry-trends-update-232581/
10. Chamber of Commerce - https://www.cbc.ca/news/canada/toronto/ontario-chamber-of-commerce-beer-store-deal-1.5161709. Businesses do not like
monopolies and/or excessive government policies that impact their ability to operate. https://www.cfib-fcei.ca/en/advocacy/red-tape-report-card
11. Ontario has many issues that Ford is slowly addressing that the Chamber of Commerce should be applauding -
https://www.slideshare.net/paulyoungcga/fiscal-and-economic-management- ontario

11. Retail / Risk factors
• On-line shopping -
https://www.michiganstateuniversityonline.com/resources/supply-
chain/restructure-retail-for-supply-chain/
• Store-Door -
https://www.supplychain247.com/article/transportation_supply_ch
ain_predictions_for_2019
• Inflation - https://globalnews.ca/news/5407052/canada-inflation-2-4-
may-2019/ (Carbon Taxation, fuel costs, supply issues, tariffs, etc)

12. 12
Augment Reality / IKEA App

13. 13
Augment Reality / Clothing App

14. 14
Augment Reality – Home Renovations App

15. Loblaws / Phone App for scanning purchases
• Scanning application as part of improving the shopping experience.
Source -https://www.cbc.ca/news/business/loblaws-walmart-shop-
and-scan-technology-1.4912024?cmp=rss

16. Restaurant Automation
Source - https://www.canadianmanufacturing.com/manufacturing/robot-servers-and-3d-menus-whats-on-tap-at-the-restaurant-of-the-future-229415/
Patrons enter a cafe and pass by a hologram of coffee pouring from a carafe into a cup. They scroll
through a three-dimensional menu and see exactly what each dish will look like to help them decide
what to order. A small robot, arms fixed to a tray, delivers the meal to the table and says “Your food
is here.”
That is what the restaurant of the not-too-distant future looks like, say those developing the
technology, which they argue can boost company profits and lower labour costs.
But so far, only a few eateries in Canada have embraced robotics and other high-tech offerings, and
more owners may be hesitant to do so due to high costs in a low-margin industry.

17. Retail Closing and Bankruptcies
• Hugo Boss ‘Mink Mile’ Canadian Flagship to Close, J. Crew CF Toronto Eaton Centre to Close, Enda B in
Vancouver Shuts Operations, Boboli Vancouver to Close Men’s Business, Walmart Closing Store at Toronto’s
Cedarbrae Mall, Hopscotch Chain in Receivership
• Source - https://www.retail-insider.com/retail-insider/2019/1/several-prominent-store-closures-in-canada-this-month

18. Payless Shoe Stores closing
Source - https://www.bnnbloomberg.ca/payless-prepares-second-bankruptcy-with-store-closures-1.1211459

19. What happen in 2018 and beyond for Retail
• Pot Stores open
• Store closures (Jean Machine and Town Shoes)
• Store openings (Nordstrom Rack, Levis Flagship, Chloé, ASICS, Sport Chek Kids, Casper, William Ashley, and more all opened stores in Canada.
• Hardware (i.e. eCommerce, robotics, etc.)
• Store Expansion (Miniso announced plans to add 500 stores in Canada over the next three years. Uniqlo Canada added four new locations in the fall of
2018. Hudson’s Bay opened its first new store in Canada in 15 years in Montreal. Canada Goose announced three new stores in North America — two in
Canada and one in the United States.
• Canadian grocery sales stopped growing — the start of a grocery “bloodbath”?
– “The bloodbath is here,” wrote Sylvain Charlebois, the dean of the faculty of management at Dalhousie University and a prominent expert on food retail, in an email to media
in July of 2018.
– The “bloodbath” in question was a drop in sales at Canadian grocers — enough to potentially put thousands out of work and close dozens of stores.
– According to Statistics Canada, sales at supermarkets and grocery stores dropped 3.1% in May of 2018, the fourth decline in the past five months.
• Grocery Delivery - 2018 saw the start of on-demand grocery delivery and expansion of click-and-collect services.
– In 2018, nearly all major grocers added grocery delivery services to their offerings, including Costco Canada.
– Walmart Canada announced plans to offer one-hour delivery through a partnership with InstaCart.
– Loblaw Companies Limited planned to expand its pick-up services to 500 more locations in 2018.
– Sobeys announced a partnership with Ocado Group.
http://storesupport.ca/canadian-retail-news-of-2018/

20. 2019 / Retail
• There was slight rebound to retail sales in February 2019 after five months
of decline - https://www.bnnbloomberg.ca/canadian-retailers-start-2019-
with-unexpected-drop-in-sales-1.1233120
• Consumer spending is expected to grow slowly in 2019 -
https://www.newswire.ca/news-releases/canadian-economy-slows-but-
conditions-in-place-for-better-growth-ahead-conference-board-of-canada-
lowers-growth-projection-for-2019-827630320.html
• More and more retailers will adopt VR and AR -
https://www.bisnow.com/national/news/retail/millions-will-use-ar-and-
vr-in-retail-settings-in-the-near-future-98494
• Carbon taxation will start impacting consumer prices. Inflation grew in
February 2019 – led by higher food prices
https://www.cbc.ca/news/business/inflation-rate-march-1.5101360

21. Sales Planning & Forecasting/ IBM Planning
Analytics

22. •Planning Analytics and Retail Sales

23. What’s next for Retailers
• More and more retailers will expand their eCommerce footprint. Areas of focus will
improve the customer shopping experience either via the website or through the use of
Augment Reality
• Consumers pocketbooks will be impacted by CPP hikes
(https://torontosun.com/news/national/92-of-middle-class-families-face-tax-hike-over-
2200-beginning-in-2019-fraser-institute) and Carbon tax
(https://www.cbc.ca/news/canada/new-brunswick/carbon-tax-federal-government-
province-1.4875848)
• More and more retailers will revisit their operations, i.e. # of stores, locations as part of
looking at more efficient ways to improve their hub and spoke delivery of their goods
and services.
• Carbon Taxation forced onto ON, MB, SK and NB. The carbon taxation will be added
to consumer prices.
• Retailers will continue to look at AI and Analytics as part of analyzing their various
businesses