Where and how do we spend our money?

Retail sales are a great indication of general economic health. Retail sales data, which is collected and compiled by Statistics Canada offers a fascinating insight into where, how and when we as consumers spend our money.

The following piece will explore monthly retail sales by industry for Ontario and Toronto since 2005.

Before delving into findings, there are a few important factors to understand when reviewing  this data:

  1. The dataset only includes retail expenses (i.e., money spent at retailers)
  2. The dataset only includes goods/products purchased (e.g., services such as barber shops, nail salons not included); however, sales at food service establishments is included in this piece because the data was available.
  3. Retail sales do not include any form of direct selling that bypasses the retail store
  4. E-commerce is included only when conducted through the same legal structure as the retail establishment

General Retail Sales

It is evident from Figure 1 that annual retail sales in both Ontario and Toronto have been increasing since 2005. To be precise, total retail sales in Ontario grew by 37% since 2005, or approximately 3.7% per year. Toronto experienced a faster growth rate at 45% since 2005, or about 4.5% annually. This is a very favourable trend for the retail sector. Furthermore, the share of retail sales in Toronto as a percent of the province has been increasing over the years due to favourable demographic trends in the city and surrounding regions. Both Ontario and Toronto experienced higher annual growth rates in retail sales in more recent years – an indication of a consistently robust recovery since the recession of 2009.

Figure 1- Annual Retail Sales, 2005-2015Retail Sales

Figure 2 shows retail sales in Ontario for every month since 2005. The chart is interesting because it displays the monthly fluctuations of retail expenses. Clearly evident in the data is the spike in spending during December, which represents holiday time expenses. Also apparent in the chart is a spike in spending during the spring and summer months.

Figure 2- Monthly Retail Sales, 2005-20151. MOnthlyu Retail

What are the biggest retail expenses?

Since 2005, the largest annual expense for Ontarians and Torontonians continue to be cars and auto related products, followed closely by food/beverage expenses. Figure 3 illustrates the retail sales by industry for 2015.

Figure 3- Retail Sales by Industry, 2015 (Food Service is technically not “retail”, but was included for comparative purposes) 3. Retail category sales 2015

The next chart (Figure 4) depicts the change in sales by industry between 2005 and 2015. Cars and auto related, building related, health and personal care, apparel, and the general merchandise retail industries, and gas stations experienced the highest growth in sales.

Figure 4- Annual % Change in Retail Sales by Industry, 2005-20154. Change in industry 05-15

Figure 5 and 6 depict the change in sales by industries between 2005 and 2010, and 2010 and 2015, respectively. Most noticeable is the huge growth in purchases of cars and auto related products in the last 5 years. In contrast, sales at electronics and appliances has barely seen any growth since 2010, compared to 6.2% annual growth between 2005 and 2010. Electronics retailers are facing increasingly insurmountable competition from e-commerce, which has stunted their sales growth over the last 5 years. The jump in car sales since 2010 is likely attributable to the pent up demand experienced from the recession of 2009, as well as dropping oil prices, which can encourage car purchases. In fact, over 95% of car and auto related purchases since 2005 took place between 2010 and 2015. The growth in apparel retail sales since 2010 is most likely as a result of the recent influx of international retailers in the Ontario and GTA market.

Figure 5- Annual % Change in Retail Sales by Industry, 2005-20105. Change in industry 05-10

Figure 6- Annual % Change in Retail Sales by Industry, 2010-20156. change in industry 10-15

Where do we eat?

Figures 7 and 8 display the monthly sales at different food service establishments in Ontario since 2005. The food service establishment dataset includes 4 sub-categories of eateries:

  • Full service: restaurants with servers/wait staff
  • Limited service: restaurants with no servers/wait staff (i.e., generally fast food) 
  • Drinking places: bars, pubs, clubs, lounges, etc.
  • Special: catering, temporary vendors, food trucks. 

The two charts each illustrate a fascinating trend. Figure 7 shows the faster growth in sales at limited service eateries over full service restaurants. Figure 8 depicts the general decline of money spent at drinking places.

Figure 7-Monthly Retail Sales at Full and Limited Service Food Establishments, 2005-20157. Full-Limited Service

Figure 8-Monthly Retail Sales at Drinking Places and Special Food Service Establishments, 2005-20158. Drinking Special

How do we spend our money throughout the year?

The next two charts show where and how money is spent during a typical year by aggregating retail sales for each month from 2005 to 2015. The grey dotted line in figure 9 represents total money spent on retailers in Ontario between January and December, with its axis on the right, and four retail industries that see a spike in holiday sales. Figure 10 shows the same grey dotted line, but with industries that don’t experience a spike in holiday sales. It is interesting to note the decline in spending during the holiday season on cars and auto related products, at gas stations and at building related stores.

Figure 9- Retail Sales between January and DecemberINdustryUp

Figure 10- Retail Sales between January and December industryDownb

Figure 11 shows the change in spending throughout the year at food service places (i.e., restaurants) and food/beverage stores (i.e., grocery stores, bakeries, convenience stores, etc.). It is clear that food service places experience highest sales during the warmer months, whereas food/beverage stores see highest sales during the holiday season in December. This is not entirely surprising as one would expect more money to be spent at restaurants and bars during “patio season” when the weather allows. On the other hand, the significant spike in food/beverage spending in December is due to the holiday season and people staying and dining indoors.

Note that sales at food/beverage places is almost double the sales at food service establishments, as shown previously in figure 3.

Figure 11- Sales at Food Service Establishments (axis on the left) and Food/Beverage Stores between January and December 11. Food ServiceBeverage

Figure 12 breaks down the spending throughout the year at food service places into full and limited service. Although more money is spent at limited service places during the year, full service eateries witness a distinct jump in sales in December. This is likely a reflection of indulging during the holiday season at more upscale restaurants.

Figure 12- Sales at Full and Limited Service Food Establishments between January and DecemberFood Service



There is clearly a lot of consumer confidence in Ontario and the City of Toronto, with annual retail sales growth rates of almost 4% and 4.5% respectively since 2005. Some of the most fascinating findings from this dataset include:

  • The building related retail industry experienced the highest growth in sales since 2005 in Ontario (3rd highest in Toronto)
  • Cars and auto related purchases were one of the main reasons the retail sector performed so well since 2010 in Ontario
  • E-commerce is having an adverse impact on Ontario electronics retailers, which have not seen any increases in sales since 2011
  • Apparel and electronics retailers experience the biggest jump in sales during December (relative to other months)
  • Purchases of necessities like food/beverage, health and personal care and general merchandise products was hardly affected by the recession of 2009
  • Spending at limited service eateries is rapidly growing and outpacing spending at full service restaurants
  • Spending at drinking venues has almost consistently been in decline over the last 10 years; spending at beer, wine and liquor stores on the contrary has increased by over 33% since 2005

One comment

  1. Dragan Dragovic · March 31, 2016

    Mnogo interesantnih detalja I podataka. Moracu detaljno da procitam. Bravo, Ico Ps. Da li imas podatke kako se kretao stock kod relevantnih retail sales in Toronto & Ontario since 2005.

    Sent from my iPad



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