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Monday, March 27, 2006

Non-store retailers

2004  Previous release

Non-store retailers posted a modest increase in revenues in 2004, but their actual share of the Canadian retailing market fell slightly.

These retailers provided $11.8 billion in goods and services, a 1.2% increase over 2003. Even so, this format has made only modest inroads into the Canadian retailing market, accounting for a mere 3.1% share in 2004 down from 3.3% in 2003.

Non-store retailers sell their products and services through other than fixed point-of-sale locations. Instead, they reach consumers through such venues as broadcasting of infomercials, direct-response advertising, traditional and electronic catalogues, door-to-door sales, in-house demonstrations, temporary display of merchandising (using stalls) and distribution by vending machines. Also included are establishments delivering products such as heating oil and newspapers to homes.

The largest group, fuel dealers, accounted for 46.0% of total non-store retailers' operating revenues in 2004. Their revenues rose only 4.6% despite higher oil prices. However, higher oil prices were reflected in the automotive fuel category, where revenues rose 12.1% over 2003. In contrast, household fuels increased by only 3.5%.

Electronic shopping and mail-order houses, the second largest group at 33.0% of revenues, saw revenues decline 1.8%.

Direct sellers, the third largest industry group at 15.0%, rebounded with a modest 1.0% increase in 2004 after sales edged down the year before.

Vending machine operators, the smallest industry group at nearly 6.0%, recorded a significant 6.0% decline in revenues.

Combined, gross margins for non-store retailers fell to 34.5% in 2004 from 35.0% in 2003, reflecting increased competition and the inability to fully pass on to customers the higher cost of purchased merchandise. This was particularly the case for fuel dealers and electronic shopping and mail-order houses.

Vending machine and coffee service operators had the highest gross margin at 51.8% in 2004, followed by direct sellers at 51.1% and electronic shopping and mail-order houses at 39.9%. Fuel dealers recorded the lowest gross margin at 23.3%.

Overall, operating profit as a percentage of operating revenue for non-store retailers increased to 7.2% in 2004 from 7.0% in 2003. Fuel dealers reported the highest operating profit at 8.1%, followed by electronic shopping and mail-order houses at 7.2%. Direct sellers recorded an operating profit of 5.0% and vending machine and coffee service operators 5.3%.

Among the 10 non-store retail major commodity groups, only 4 posted higher sales. The most notable gain was recorded by the group comprising household and automotive fuels, oils and additives (+6.0%), largely a result of higher oil prices.

Sales rose 4.5% in the health and personal care products group, reflecting continued growth in sales by Canadian Internet pharmacies. The most noteworthy decline occurred in the group comprising hardware, home renovation and lawn and garden products (-21.1%).

Note: 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. Operating profit is calculated 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 (1-877-421-3067; 613-951-3549; retailinfo@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Denis Fournier (613-951-0096; denis.fournier@statcan.gc.ca), Distributive Trades Division.

Non-store retail by industry

2004

  Operating revenues Gross margin Operating profit Operating revenues 2003 to 2004 Operating revenues
  $ thousands % change % share
Total 11,845,350  4,086,825  852,454  1.2  100.0 
Electronic shopping and mail-order houses 3,934,386 1,568,170 281,425 -1.8 33.2
Vending machine and coffee service operators 677,587 350,966 36,161 -6.0 5.7
Fuel dealers 5,502,136 1,283,610 447,781 4.6 46.4
Direct selling businesses 1,731,241 884,079 87,086 1.0 14.6

Non-store retail sales by major commodity group

2004

Commodities Sales of goods and services Sales of goods and services 2003 to 2004 Sales of goods and services
  $ thousands % change % share
Total 11,749,550  1.3  100.0 
Food and beverages (excl. meals and lunches) 971,057 -3.0 8.3
Health and personal care 1,508,353 4.5 12.8
Clothing, footwear and accessories 658,437 1.7 5.6
Housewares (non-electric) and household supplies 224,953 -8.5 1.9
Home furnishings and electronics 1,221,316 1.5 10.4
Hardware, home renovation and lawn and garden products 262,307 -21.1 2.2
Sporting and leisure goods 807,937 -5.9 6.9
Household and automotive fuels, oils and additives 5,224,972 6.0 44.5
Services (incl. meals and lunches, repairs, rental and leasing) 310,365 -1.3 2.6
Other goods 559,852 -10.1 4.8



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