Alberta's retail sector is a testament to the resilience and adaptability of the province's economy. Despite the global challenges that have marked recent years, Alberta's retail sector has shown remarkable growth, outpacing the national average by more than double. According to data from Statistics Canada, Alberta's retail sector has grown by 7.5 per cent this year to date, more than twice the national average of 3.5 per cent1. This growth is a testament to the resilience of Albertans and their propensity to spend, even in the face of economic uncertainty.
The growth in Alberta's retail sector can be attributed to several factors.
One of the key drivers has been the influx of new residents into the province. Migration from other provinces and internationally, coupled with a stronger job market, has contributed to higher retail sales. This demographic shift has brought with it a change in consumer behaviour, with certain sectors seeing significant increases. Clothing, shoes, and sporting hobbies are among the sectors that have seen strong increases1.
However, it's not all smooth sailing. The rising interest rates have started to impact people's purchasing decisions, particularly for big-ticket items like furniture, which are more interest-rate sensitive. This sensitivity to interest rates is a sign of the changing dynamics in Alberta's consumer market. As interest rates rise, consumers may start to pull back on discretionary expenditures, which could impact sectors like hospitality, tourism, and retail.
Despite these challenges, optimism remains high in the business community. According to a survey conducted by Statistics Canada, while businesses across the country face challenges such as rising costs, labour shortages, falling demand, and supply-chain problems, optimism remains high overall1.
However, consumer confidence in the Prairies, which includes Alberta, has shown signs of wavering. According to the Conference Board of Canada, consumer confidence in the Prairies was down for the second consecutive month in July 20232. Concerns over job prospects, household budget expectations, and sentiment about making major purchases have all contributed to this decline.
Despite the dip in consumer confidence, it's important to note that the number of respondents expecting stability in job prospects remained near record highs. This suggests that while there may be some uncertainty, there is also a strong sense of resilience and optimism in the face of these challenges.
In conclusion, Alberta's consumer market is a dynamic and evolving landscape. Despite the challenges, there are also opportunities for growth and success. The key is to understand these changes, adapt to them, and seize the opportunities they present.