News / Edmonton

On the road again: Spike in driving leads Alberta retail sales turnaround

Alberta will see 8.2 per cent retail growth this year and most of it will come from vehicle expenditures, according to new Colliers report

Experts say Albertans have been carpooling and taking public transit more often in the slumping economy, but consumer confidence is rising.

Supplied / Ford

Experts say Albertans have been carpooling and taking public transit more often in the slumping economy, but consumer confidence is rising.

Albertans are firing up their trucks again.

The province is projected to see retail sales spike 8.2 per cent in 2017, after negative growth the previous two years – and most of that increase is due to more people driving, according to the Colliers 2017 Fall Retail Report released Tuesday.

“Alberta is a little different when we’re looking at spending versus the rest of the country, because a good portion of their retail spending is based on automotive uses and gasoline due to the higher use of vehicles, basically,” said Colliers planning consultant Russell Whitehead.

“When the oil slump occurred, there was a dramatic impact specifically on this type of spending.”

In 2016, Alberta was the only province in Canada with negative overall retail growth at -1.2 per cent.

Whitehead said Albertans have been carpooling and taking public transit more often in the slumping economy, but consumer confidence is rising as the unemployment rate dropped from 8.6 per cent last year to 7.8 per cent this year.

Automotive and gas spending is expected to rise 15.3 per cent in 2017, making up most of the overall retail spike.

People had also been holding off on buying new vehicles, Whitehead said, but car sales are back on the upswing.

Dwight Kurtz, general manager at Koch Ford Lincoln in Edmonton, said he's seen a "huge spike" in fleet sales to oil, construction and service companies this year, as well as a moderate increase in showroom sales.

Factoring out auto and gas, sales in other areas are showing an increase of about two per cent across Alberta.

Whitehead said retail sales overall have bounced back to “near-normal” levels.

He said health-food stores, small fitness studios and low-priced clothing outlets are also thriving.

“The economy is still bouncing back in Alberta, so people are going to want to spend more of their hard earned money on lifestyle goods that are more affordable, rather than going out and spending more on luxury items,” Whitehead said.

Albertans are projected to spend $81 billion by the end of this year, compared to $75 billion in 2016.

Across Canada, retail sales are predicted to grow by seven per cent to reach approximately $590 billion by the end of 2017.

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