Consumer spending heading toward Christmas
With inflections surging and stricter public health restrictions in place, overall retail spending is likely to be relatively weak as we close out the year
By ATB Economics 11 December 2020 2 min read
December is an important month for retailers because sales spike as consumers stock up on gifts and supplies for the holiday season.
In fact, if we exclude motor vehicle dealers and gas stations (which tend to do better during the warmer months), December is consistently the highest month for (unadjusted) retail sales in Alberta.
Unfortunately, holiday spending in December is not what it used to be. Again taking out motor vehicle dealers and gas stations, inflation-adjusted per capita retail sales in Alberta were 21 per cent lower in December 2019 than they were in December 2006 when Alberta was in the midst of a natural gas boom.
What’s more, inflation-adjusted per capita sales in December have fallen every year since 2015 and reflects the economic challenges Alberta has been facing over the last half decade.
And just when we were hoping 2020 might be a better year, COVID-19 came along and changed everything.
So what can we expect this holiday season?
On the bright side, consumer spending was, while not particularly strong, back to pre-pandemic levels heading into December.
Average daily spending* was down by 17 per cent in April compared to February, but has since rebounded and was only about 1 per cent below February’s level in November.
However, with infections surging and stricter public health restrictions in place, overall retail spending is likely to be relatively weak as we close out the year.
It might just be wishful thinking but—despite the poor economic conditions and job losses—we could be surprised and find that shoppers splurge at least somewhat this year in response to the pall that has been cast over the holiday season by the pandemic.
More local shopping might also help mitigate some of the negative effects of the pandemic on Alberta retailers, though this might be offset by a spike in online purchases from international retailers such as Amazon.
ANSWER to Thursday’s trivia question: What is considered to be the world’s most valuable residence? The world's most valuable residence is thought to be Buckingham Palace, home of Great Britain’s Queen Elizabeth II, worth $1.55 billion; the Queen doesn't own the palace—it's held in trust. (Source: Investopedia)
Today’s question: What is the best selling toy of all time?
*The average daily consumer spending data in today's Owl was generated by ATB Financial’s Data + AI, Artificial Intelligence Delivery, AI Labs Team. In order to smooth out regular day-to-day fluctuations, daily spending figures are an average of the previous two weeks.
The analysis is based on aggregate debit and credit card spending data of consumer customers of ATB Financial. While the data provide an indication of spending patterns in Alberta during the COVID-19 pandemic, ATB customers are not necessarily fully representative of all consumers in Alberta.
Protecting the privacy, security and personal information of ATB customers is not just our number one priority—it is at the heart of our corporate values and commitment to Albertans. The data used in this report are aggregated, do not contain personal information, and cannot be used to identify customers or merchants. For more information about our commitment to customer privacy, please visit our website.