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The Good, the Bad and the Retail - Part 1
Shining some light on the current state of the retail industry
By Devon Babin
Retail is a small word that means a lot. Those six letters encompass some of the biggest sectors consumers deal with every day. From cars to computers and from clothing to cookware, retail is affected by a lot of different industries and underlying factors.
Although many are still heralding the recent recession as being over with, there is still a lot of volatility in the markets and a lot of information to sift through to truly get a sense of how the wide range of retail sectors are doing.
Although numbers are not available specifically for Calgary as a whole will continue to see some positive growth from a retail perspective over the next few months, but that growth will be modest.
“Retail sales are expected to grow through 2010 and growth will be gradual, but steady,” says Peter Pilarski, the Retail Council of Canada’s director of government relations and membership services for Alberta. Looking back to the first quarter he says, “In March, retail sales surpassed $5 billion in Alberta, which is a 9.9 per cent increase over the same period last year and a 1.5 per cent increase from February. This is consistent with growth we have seen as Alberta recovers from the recession.”
These are positive signs for the province, especially considering how hard the province was hit after the economic boom Alberta saw only a few years ago. Because the province had so much prosperity so quickly, there was nowhere to go but down.
“We were running at unsustainable levels,” says Adam Legge, chief economist with Calgary Economic Development.
The message coming from the Retail Council of Canada (RCC) tends to align itself with Legge’s view.
“While sales in Alberta have been soft in comparison to other provinces when doing a year-over-year comparison, Albertans still spend more per capita than any other Canadian,” says Pilarski. “So, one needs to be careful when looking at the numbers. In 2006 and 2007, Alberta led retail sales growth by a long shot, so we are comparing against much higher base numbers. However, Alberta is expected to lead the country in year-over-year retail sales growth as the economy gets stronger.”
And that is the hope: continued growth and prosperity as we come into the final months of 2010. The RCC released a conditions report in the first quarter of 2010. The report’s results came largely from a survey performed in February that included 56 large and mid-size members of the RCC that together operate more than 8,500 stores.
In the report the overall feeling of retailers echoes Pilarski’s feeling that growth will continue throughout the year, but at a modest pace.
“Most respondents expect conditions in 2010 will be a continuation of the pattern of recent months. They foresee steady moderate growth in sales. Measured growth will appear stronger in the first half than in the second half of the year. The weak sales performance in Q1 and Q2 of 2009 will exaggerate growth rates in the first half of 2010. Respondents believe customer confidence and shopping behaviour will actually strengthen over the course of the year,” states the report.
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