Retail Trade (NAICS 44-45): Ontario, 2024-2026
HIGHLIGHTS
- There were 842,500 people employed in Ontario‘s retail trade sector, comprising 10.6% of the province‘s total workforce in 2023.
- Employment in the retail trade sector decreased by 3.2% in 2023.
- Employment is expected to see slight growth over the 2024-2026 forecast period, supported by ongoing e-commerce activities and population growth in Ontario.
ABOUT THE SECTOR
Composition and importance of the sector
The retail trade sector is comprised of establishments that sell merchandise in small quantities to the public as the final step in the distribution of merchandise.>It includes retailers that operate brick-and-mortar locations (e.g., food and beverage stores, clothing and clothing accessory stores, general merchandise stores) well as retailers who sell products and goods through other methods (e.g., internet retail, direct selling, and mail-order retail).
Some types of retailers also provide after-sales services, such as repair and installation. Motor vehicle and parts dealers, and electronic and appliance stores fall into this category.
In 2023, the retail trade sector employed 842,500 people in Ontario, approximately 10.6% of the province‘s workforce.
In 2023, the sector contributed $40.1 billion to Ontario‘s Gross Domestic Product (GDP), or approximately 4.6% of the province‘s total GDP.
- Between 2022 and 2023, output in the industry declined marginally, by $97.7 million (-0.20%).
- Between Q1 2023 and Q1 2024, output grew by 4.4%.
Graph 1. Employment Share by Subsector
Sources: Statistics Canada, Labour Force Survey, Custom Table
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Geographical distribution of employment
The retail trade sector is concentrated in southern Ontario, particularly in the Toronto Economic Region (ER). In 2023, retail trade employment in the Toronto ER accounted for nearly half of total provincial employment (46.9%), followed by Ottawa (10.4%) and Hamilton-Niagara Peninsula (10.4%).
Ontario represents a large proportion of the sector‘s total employment nationally: in 2023, more than a third of all individuals employed in this sector across Canada worked in Ontario (36.9%), comparable to Ontario‘s share of total employment in Canada (39.2%).
Table 1. Employment by Economic Region
Source: Source: Statistics Canada, Labour Force Survey, Custom Table
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WORKFORCE
Workforce characteristics
- The workforce in Ontario‘s retail trade sector tends to be younger, with 29.2% of its workers aged 15 to 24, notably higher than the average across all industries (13.2%).
- Part-time work was more common in this sector at 35.5%, compared to 17.3% for all industries across Ontario in 2023.
- Self-employment was less common in this sector at 7.5% in 2023, compared to 13.6% for all industries across Ontario.
- The average hourly wage in retail trade was $21.82 in 2023, below the provincial average of $29.18.
- A lower proportion of the retail trade workforce in Ontario holds a university degree (22.9%) compared to the provincial average (39.3%).
Table 2. Top 5 Occupations
Source: Statistics Canada, Labour Force Survey, Custom Table
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RECENT HISTORY
Employment in Ontario‘s retail trade sector has been recovering steadily since 2020. However, compared to 2022, employment levels fell in several subsectors in 2023. Those with the largest proportional declines include: furniture and home furnishing stores (-12.0%); electronics and appliance stores (-11.2%); and building material, garden equipment, and supplies dealers (-9.5%). Some retailers in these subsectors implemented layoffs and restructuring initiatives to maintain profitability and adapt to changing market conditions. In contrast, retail subsectors that experienced the largest proportional increases in employment were gasoline stations (+9.8%) and motor vehicle and parts dealers (+9.7%), likely reflecting the notable increase in the number of new motor vehicle registrations in Ontario (+41.3% in 2023).
Online shopping and e-commerce activities remained important for the retail trade sector in 2023, even as consumers returned to in-person shopping. For example, throughout the first half of 2023, retailers in Ontario were significantly more likely to invest in online sales or e-commerce capabilities (36.4%) than businesses in other industries (17%), reflecting an ongoing shift in businesses‘ operating models. Likewise, e-commerce sales continue to grow; e-commerce sales from Canadian-based retailers totalled $45.1 billion (or 5.7% of total retail sales) in 2023, surpassing the amount sold in 2020 ($39.4 billion).
However, consumer demand for goods and services is slowing so far in 2024, as higher interest rates increase debt servicing costs for households and limit discretionary spending. Retail sales in Ontario have been declining consistently since the start of the year, falling by approximately 2.8% between January and June. In addition, the provincial unemployment rate in August 2024 reached 7.1%, a 1.9 percentage point increase since the start of 2023.
Graph 2. Sector Employment, Sector Gross Domestic Product (GDP), Adjusted Household Disposable Income in Ontario
Sources: Statistics Canada, Labour Force Survey, Custom Table
Gross Domestic Product by Industry – Provincial and Territorial (Annual)
Provincial and Territorial GDP by Income and by Expenditure Accounts
** Data are expressed as index where year 2013 = 100%
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EMPLOYMENT OUTLOOKS
Employment in Ontario‘s retail trade sector is expected to see slight growth during the 2024-2026 forecast period.
Despite some retail closures in Ontario in 2024, the demand for retail space remains positive, particularly in the Greater Toronto Area. Several large national and international retailers – including luxury retail brands, have announced store expansions in Toronto in recent months. Brick and mortar retail stores are generally performing well, even with the presence of online shopping.
E-commerce will likely remain an important platform for retail businesses, with its share of total retail sales forecasted to grow in Canada. In addition, consumers are increasingly expecting retailers to facilitate more seamless experiences between shopping in-store with the convenience and product variety of shopping online. As such, it is expected that retailers will continue to invest in their e-commerce capabilities, such as technologies that allow customers to easily interact with its business across multiple channels (e.g., via the web, brick and mortar locations, and in mobile applications).
Ontario‘s growing population could also help support overall employment in the retail trade sector. Between Q2 2023 and Q2 2024, Ontario‘s population grew by approximately 3.5% (or 540,000 people). However, the rate of growth may slow during the forecast period given new limits on the arrivals of temporary residents to Canada.
Lastly, given the retail trade sector is sustained by consumer spending, it is sensitive to general economic conditions. There are indications that higher interest rates have increased debt servicing costs for households and limited discretionary spending. However, the Bank of Canada has begun cutting its key interest rate since early summer, which may positively impact household spending later on in the forecast period.
Table 3. Employment Change in Retail Trade: July 2019 vs. July 2024
Sources: Service Canada, Labour Force Survey, Custom Table
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Key trends affecting the outlook of the retail trade sector
- Ongoing e-commerce activities and investments in new tools and technologies to meet evolving customer preferences and to maintain competitiveness.
- Higher non-discretionary expenses (e.g., food, housing, energy) may affect consumer spending on other types of goods.
- Overall macroeconomic conditions and population growth.
FOR FURTHER INFORMATION
Note: In preparing this document, the authors have taken care to provide clients with labour market information that is timely and accurate at the time of publication. Since labour market conditions are dynamic, some of the information presented here may have changed since this document was published. Users are encouraged to also refer to other sources for additional information on the local economy and labour market. Information contained in this document does not necessarily reflect official policies of Employment and Social Development Canada.
Prepared by: Labour Market and Socio-economic Information Directorate, Service Canada, Ontario Region
For further information, please contact LMSID at: Contact: Labour Market Information - Canada.ca (services.gc.ca)
APPENDIX
Table A1. Geographical Distribution of the Sector
Source: Statistics Canada, Labour Force Survey, Custom Table
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Table A2. Characteristics of Employed Persons
Source: Statistics Canada, Labour Force Survey, Custom Table
* Average annual growth rate for last ten years available data
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| Retail Trade | All Sectors | |||||
|---|---|---|---|---|---|---|
| Employment, 2023 | Share of Total (%) | AAGR (%) | Share of Total (%) | AAGR (%) | ||
| Employment | 842,500 | 100.0% | 0.6% | 100.0% | 1.6% | |
| Male | 415,400 | 49.3% | 1.4% | 52.6% | 1.7% | |
| Female | 427,100 | 50.7% | -0.1% | 47.4% | 1.4% | |
| 15-24 years old | 246,300 | 29.2% | 0.4% | 13.2% | 1.3% | |
| 25-54 years old | 421,100 | 50.0% | 0.0% | 65.0% | 1.2% | |
| 55 years and older | 175,200 | 20.8% | 2.7% | 21.8% | 3.0% | |
| Worked full-time | 543,300 | 64.5% | 1.2% | 82.7% | 1.8% | |
| Worked part-time | 299,300 | 35.5% | -0.4% | 17.3% | 0.3% | |
| Self-employed | 63,400 | 7.5% | -1.0% | 13.6% | 0.4% | |
| Employees | 779,200 | 92.5% | 0.7% | 86.4% | 1.8% | |
| Permanent job | x | x | x | 76.6% | 1.9% | |
| Temporary job | x | x | x | 9.7% | 0.9% | |
| Less than high school | 96,600 | 11.5% | -0.9% | 6.1% | -2.1% | |
| High school graduate | 308,900 | 36.7% | -0.7% | 22.3% | -0.4% | |
| Postsecondary cert. or diploma | 244,100 | 29.0% | 1.1% | 32.3% | 1.3% | |
| University degree | 192,900 | 22.9% | 3.5% | 39.3% | 4.1% | |
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