Non-store retailers

Non-store retailers saw a moderate increase in the value of goods and services provided in the Canadian retailing market in 2001, although their share in the market as a whole remained about the same as the year before.

Non-store retailers are those retailers who sell their products and services by means other than fixed point-of-sale locations. Instead, they reach consumers through a variety of means, including broadcasting of infomercials, direct-response advertising, traditional and electronic catalogues, door-to-door sales, in-house demonstration, temporary display of merchandise (using stalls) and distribution by vending machines. This sub-sector also includes establishments delivering products such as heating oil or newspapers to homes.

To date, this retail format has made only modest inroads into the Canadian retailing market. In 2001, non-store retailers accounted for 3% of all Canadian retailing and provided $10.5 billion in goods and services, a 2.9% increase over 2000.

Fuel dealers accounted for nearly half (45%) of total non-store retail operating revenues in 2001. Electronic shopping and mail-order houses held the second largest market share at 33%, followed by direct selling establishments at 15%. Vending machines and coffee service operators had the lowest market share at just 7%.

Operating revenues rose in all provinces and territories in 2001. The Yukon, Northwest Territories and Nunavut combined posted the largest increase of 19.6%, followed by Manitoba at 14.6% and Prince Edward Island at 8.8%. Two provinces posted gains below the national average: Ontario at 0.6% and Newfoundland and Labrador at 2.2%.

Gross margins declined just slightly from 38.8% in 2000 to 38.5% in 2001 for non-store retailers. Vending machine and coffee service operators had the highest gross margin at 52.5%, while fuel dealers recorded the lowest at 25.4%.

In spite of the high gross margin, vending machine and coffee service operators recorded virtually no operating profit in 2001, mainly due to the installation of new machines and reprogramming of existing machines to accept the introduction of new coins. The other three industry groups registered strong increases in operating profits.

Although growth was modest in 2001, eight of the eleven non-store retail major commodity groups posted increases in sales. Hardware, home renovation and lawn and garden products saw the largest increase in sales (22.0%), followed by food and beverages (18.5%) and revenue from services (16.0%). Electronic shopping and mail order houses and fuel dealers are the main distributors of hardware, home renovation and lawn and garden products.

On the other hand, clothing, footwear and accessories recorded the largest decline at 10.2%. Home furnishings and electronics were down 6.0%, and those in the "other goods" category dropped 3%.

Household fuels and automotive fuels, oils and additives combined accounted for 41.6% of total commodities sold by non-store retailers in 2001. Within non-store retail, the share held by each of the eleven commodity groups remained virtually unchanged from 2000.

Note: The information in this report is based on the North American Industry Classification System (NAICS). The report covers establishments primarily engaged in retailing merchandise by non-store methods, and includes all sales and other operating revenues of these establishments. Gross margin is measured by subtracting cost of goods sold (opening inventory plus purchases and direct costs minus closing inventory) from total operating revenues. The ratio is expressed as a percentage of total operating revenues. This measure is also known as return on sales. Operating profit is obtained by subtracting total operating expenses plus cost of goods sold from total operating revenues. The ratio is expressed as a percentage of total operating revenues.

Definitions, data sources and methods: survey number 2448.

For general information or to order data, contact Client Services (1-800-421-3067; 613-951-3549; retailinfo@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Serge Gervais (613-951-9218; serge.gervais@statcan.gc.ca), Distributive Trades Division.