*(Sporting Life store at Toronto's Yorkdale Shopping Centre. Photo: Craig Patterson)*

While there's plenty of news of a so-called 'retail apocalypse' (mainly in the United States), it appears to be generally untrue for many retailers in Canada over the past 12 months.

The following is an analysis by noted retail consultant Ed Strapagiel, who publishes a monthly report with his perspective on the state of the Canadian retail industry. This is Mr. Strapagiel's take on the year 2017, showing that retail sales were strong in many categories, overall, compared to the year before. Included are several charts laying out Mr. Strapagiel's analysis, followed by a summary of sales by store-type and e-commerce sales.

By Ed Strapagiel

For the 3 months ending October, total Canadian location-based retail sales increased 7.5% year-over-year on a not seasonally adjusted basis, according to the latest Statistics Canada data. The positive momentum just keeps on rolling.

Year-to-date retail sales are now 7.0% ahead of last year after 10 months of 2017, and the underlying 12 month growth rate (green line in the above chart) is also up 7.0%. If October is any indication, both these measures should at least maintain their current levels to year end. At this pace, 2017 is poised to be one of the strongest years for Canadian retail in recent memory.

The big growth drivers are new car dealers and gasoline stations, where retail sales growth is at a high level versus a year ago, as expected. Supermarkets and other grocery stores are the chief drag on overall retail sales, which has been the case for several years. The real star of 2017 however is the Store Merchandise sector, where sales gains have really taken off.

For the 3 months ending October 2017, retail sales in the Food & Drug sector were up a modest 2.9% year-over-year. This is within the historical range, but still not particularly robust. The underlying 12 month trend (green line in the above chart) has been slowly weakening for most of the year.

Retail sales at grocery stores were up just 0.7% year-over-year for the 3 months ending October, and have gained only 1.0% year-to-date in 2017. Of note is that the small specialty food stores group is bucking the trend with retail sales up 7.5% year-to-date so far this year.

In 2016, strong retail sales increases at health & personal care stores more than offset the weakening picture at food & beverage retailers. This effect is not nearly as pronounced as it was a year ago.

The exceptionally high retail sales growth rates in the Store Merchandise sector have cooled somewhat in the last couple of months. Nevertheless, the 3 month trend (orange line in the above chart) is still above historical norms and continues to run ahead of the underlying 12 month trend (green line). Early reports also indicate that many retailers had a good Christmas season. At the current pace, Store Merchandise could have a 2017 sales growth rate that's a 10 year high.

Building material & garden equipment/supplies dealers are having a particularly good year in 2017, with year-to-date sales up 13.2%. Electronics & appliance stores are also up by double digits, recording an 11.1% gain year-to-date after 10 months.

In fact, all retail store types in this sector are up on a year-to-date basis. The main laggard is home furnishings stores, with retail sales up a relatively modest 1.6% so far this year.

Note that Statistics Canada is now suppressing the breakdown of general merchandise stores for confidentiality reasons. The figures in the table below are estimates based on previous trends.

Retail sales growth in the Automotive & Related sector remains at record high levels. The two main components, vehicle dealers and gasoline stations, are both producing strong sales increases.

New car dealers are likely to hit an all-time sales record in 2017, in terms of both units and dollars. Their year-to-date retail sales are up 10.5% after 10 months of the year.

Gasoline station sales have gained even more, with retail sales up 12.8% year-to-date. This is mostly due to increasing pump prices rather than people buying more gas.

BY THE NUMBERS:

For definitions of store types, see Statistics Canada NAICS.

Overall, e-commerce represents about 2.5% of Canadian retail sales for the 12 months ending October 2017, including both pure play operators as well as the online operations of brick & mortar stores. Canadian consumers however also buy online from foreign websites, spending which is not captured in these numbers.

Year-to-date results for 2017 (10 months) show that Canadian e-commerce sales are up 35.5% from a year ago, a much higher gain than for retail in general.

Note that location based retail is the same as that in the preceding large "By The Numbers" table. It's what's normally reported as Canadian retail sales. Except that it isn't. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which covers electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending October, electronic shopping and mail-order houses had an estimated $8.5 billion in e-commerce sales.

But that's not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending October, this group had an estimated $6.6 billion in e-commerce sales. With electronic shopping and mail-order houses, there's a grand total of $15.1 billion in e-commerce sales by Canadian operators over a 12 month period. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include purchases made by foreigners at Canadian e-commerce businesses.

For electronic shopping and mail-order houses, an estimated 82.7% of their sales are allocated to e-commerce. For the (mostly) bricks & mortar crowd, it can be estimated that just 1.1% of their total sales come from e-commerce.

In the final section of the above table, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generate an estimated 56.4% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers' share of e-commerce is 43.6%.

For more explanation on the e-commerce numbers, see Statistics Canada: Retail E-commerce in Canada.

This analysis is updated monthly as new numbers are published by Statistics Canada. [Connect with Ed Strapagiel on LinkedIn]