As the effects of the COVID-19 pandemic began to spread throughout the economy, wholesale sales fell 2.2 per cent to $63.9 billion in March, following three consecutive monthly gains, reported Statistics Canada on Wednesday.
Alberta saw wholesale sales drop by 1.5 per cent month-over-month and by 4.5 per cent year-over-year to $6.5 billion.
However, in the first quarter of 2020 in Canada, sales increased 1.4 per cent, following a 1.4 per cent decline in the fourth quarter of 2019. Higher sales were recorded in three of the seven subsectors, led by the food, beverage and tobacco subsector (+4.1 per cent) and the miscellaneous subsector (+4.8 per cent), said the federal agency.
“Over three-quarters (75.9 per cent) of wholesalers saw their business activity impacted by the COVID-19 pandemic. The personal and household goods subsector (84.9 per cent) reported the highest proportion of affected businesses, led by the home furnishings industry (90.0 per cent) and the personal goods industry (87.4 per cent),” said StatsCan.
“Lower sales volumes were caused by the mandatory closure of non-essential businesses. The pharmaceuticals and pharmacy supplies industry reported that 43.7 per cent of businesses were affected by COVID-19. Many of these businesses were impacted positively, bolstered by bulk purchasing and abnormal buying patterns.
“About four-fifths of the respondents in the motor vehicle and motor vehicle parts and accessories subsector reported the second-highest levels of business disruptions from COVID-19, led by the used motor vehicle parts and accessories industry (84.1 per cent). These businesses noted that the impact to their sales was caused by the closure of non-essential operations.”
Because April was the first full month of widespread quarantining, reported impacts on businesses for that month should be more severe than those reported in March, said the federal agency.
“Some industries, like the motor vehicle industry, were almost completely shut down as manufacturing facilities were closed and dealerships relied heavily on online sales. The food industry suffered from a variety of negative events, including the shutdown of meat processing plants, which caused a plunge in processing capacity and impacted prices for live animals, especially pork. Dine-in restaurants were closed for the whole month of April, so lower sales of food wholesaling to restaurants can be expected compared with March,” it said.
“However, grocery sales were higher because of higher demand for food at grocery stores, and because food prices were up as consumers continued to stockpile.Construction activity in most of Canada also ground to a halt. Sales of construction equipment and supplies are starting to suffer.”
