As we officially mark the one-year anniversary of COVID-19’s impact in Canada, homebound Canadians continue to spend on categories that represent comfort, entertainment, recreation, and personal care.  

“2020 was a year of fear, uncertainty, and doubt. As consumers, we were forced to reevaluate where and how to spend their money and, perhaps more importantly, what truly brings them joy,” said Tamara Szames, Canadian Retail Industry Analyst at The NPD Group.

In-person dining remains closed across much of the country, so it is no surprise that growth in small appliance sales has continued this year. In January alone the category saw a +30% increase in year-over-year sales, which is the strongest growth we have seen since Amazon’s Prime Day in October. Leading the way, kitchen appliances grew by +39% in January, followed by floorcare (+35%) and personal care (+17%). Canadians also ramped-up their spending on home hair clippers (+116%), breadmakers (+170%), and freezers (+75%).

Consumers in Canada have continued to spend on categories that support working and learning from home. Dollar sales in the consumer electronics industry increased by +36% in January, driven by notebook computers, which continue to be a top seller. This generated one-third of the growth dollars for the month. Tablets, TVs, and the work-from-home group generated an additional third. Computer monitors and PC headsets both saw 2x growth vs. January 2020; microphones and webcams outsold last year by 3x and 5x respectively.

Entertainment Erupts as a Pandemic Priority

Entertainment categories also continued to show strong year-over-year growth in January, driven by additional lockdowns and stay-at-home orders that prompted further pandemic buying. Toy sales increased by +19% in January. Games and puzzles contributed 34% of gains. This was the largest category, up +52% year over year. Strategic trading card games accounted for 47% of growth, and adult puzzles another 27%. 

The trend of impulse purchases being replaced by planned purchases also continued in 2021. The under $10 price band in toys fell from 50% of unit sales in January 2020 to 44% this year. Those 6 share points shifted to the $20 – $40 price band, suggesting consumers are being more strategic with their spend. 

When it comes to the video games industry in Canada, better availability of new hardware systems contributed to a +167% increase in hardware dollar sales from January 2020 to January 2021. Software and accessories also experienced growth compared to 2020 as Canadians continued to search for ways to stay entertained and connected.

Optimism Emerges in Impacted Industries 

While some industries continue to benefit from changes in consumer spending, others remain challenged by retail closures and ongoing restrictions. Fashion and beauty, two industries that rely heavily on fantasy and escapism, declined by almost 20% in 2020. Yet, segments of the market that were associated with comfort, convenience and enhancing our lives did see growth and will continue to outperform in 2021. 

While the total prestige beauty industry saw a -17% sales decline in 2020, categories such as skincare and hair performed relatively well, suggesting that consumers are still sticklers for their beauty routines. Skincare maintained its standing as Canada’s number one category and had the lowest impact on unit sales, which experienced a decline of only -1% year over year. The hair category faired even better, growing 34% in 2020 on its way to becoming the fastest growing category across all the countries for prestige beauty sales tracked by The NPD Group.

Comfort has also become extremely important in our day-to-day lives. Slippers and athletic loungewear have benefited from our stay-at-home lifestyles. Sales in these two categories increased in January by +5% and +4%, respectively. Hiking footwear also increased by double digits in January as Canadians looked to experience the outdoors, a trend that will also continue in 2021. 

“What has become abundantly clear is that consumers continue to embrace categories and products that enhance comfort, entertainment, wellness, and recreation during these challenging times. As we slowly emerge from the pandemic, I expect this trend will continue as consumers search out ways to make the new normal more enjoyable,” says Szames.

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