Christmas sales were strong, but not as strong as last year, says a leading retail analyst, who predicts a 鈥渟oftening鈥� for the retail industry in 2019.
Greg Wilson, director of government relations in British Columbia for the Retail Council of Canada, made these observations as the industry prepares for a slow-down after five strong years of growth.
More information will become available in two months when Statistics Canada releases retail figures for December. The most available retail figures for October show sluggish retail sales.
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Whereas British Columbia was once a strong market for retailers, it is among the weakest in the country, he said, pointing to the Retail Council of Canada鈥檚 Holiday Retail Conditions Report that the organization compiles through interviews with members.
鈥淭he slow-down in British Columbia has become more widespread, with the majority of members saying it is now one of their weaker regions,鈥� it reads. 鈥淭he softness occurs in all parts of the province.鈥�
There are several reasons, according to Wilson. First, the slow down in real estate has impacted retail. Second, retailers, especially in parts of Greater Vancouver are struggling to retain staff, because of low wages relative to local housing costs, a phenomenon also apparent in other parts of the province such as Whistler.
Retailers in the Greater Victoria have also complained about the absence of staff, citing housing and transportation costs as factors.
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Other issues also loom, said Wilson, including the Employers Health Tax (EHT) effective Jan. 1 and a higher minimum wage effective June 1.
While the retail council welcomes some of these measures, they are opposed to others, said Wilson.
He is concerned about the EHT, which replaces the Medical Service Premiums (MSP), with the proviso that the provincial government collects both in 2019.
This double-dipping punishes what Wilson called 鈥減rogressive鈥� retailers, who already pay their employees鈥� MSP.
Issues beyond the borders of the British Columbia may also keep up retailers at night.
鈥淟ike their customers, retailers are very aware it is an uncertain world,鈥� reads the council鈥檚 internal assessment. 鈥淭he items in the big picture 鈥� trade disagreements, a slower economy, geopolitical tension, the exchange rate, technological change, cost and competitive pressures 鈥� intrude when retail execs are trying to get to sleep.鈥�
The council鈥檚 internal reporting says most retailers are planning for 鈥渧ery modest increases in sales, characterized by flat store sales and strong online increases鈥� with overall sales growth in the two per cent range.
The retail environment is 鈥渟oftening,鈥� said Wilson. But he notes this development is relative, he said.
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