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Retail sales up in September: Statistics Canada

Retail sales climbed more than expected in September to mark the fifth consecutive monthly increase since the record drop in April due to the pandemic, but economists warned that rising COVID-19 cases and looming restrictions could mean weakness ahead.

Statistics Canada said Friday that retail sales rose 1.1% to $53.9 billion in September, topping the 0.2% increase that economists on average had been expecting, according to financial data firm Refinitiv

“Today’s release was a nice surprise, but with COVID-19 situation deteriorating rapidly across much of the country since September, further good news will likely be on hold for now,” TD Bank economist Ksenia Bushmeneva wrote in a report.

“Tighter new restrictions in Manitoba and potentially a second lockdown in some of the hard-hit areas in Ontario does not bode well for in-store spending heading into a busy holiday season.”

Government officials have warned that the spread of COVID-19 is accelerating and urged Canadians to reduce their personal contacts in an effort to help slow the pandemic.

Statistics Canada said its early estimate for October suggests retail sales for the month were relatively unchanged, but noted it was a preliminary figure and would be revised.

“Given the increasing COVID-driven regional restrictions in recent weeks, November and December could see some weakness,” wrote Benjamin Reitzes, director, Canadian rates and macro strategist at the Bank of Montreal.

Statistics Canada said retail sales were up in nine of the 11 subsectors in September with core retail sales–which excludes gasoline stations and motor vehicle and parts dealers–rose 1.1%.

Sales at general merchandise stores climbed 1.8%, while sales at food and beverage stores rose 0.9%, partially due to higher prices for meat, fish and dairy products. Retail sales at furniture and home furnishings stores added 4.5%.

Sales at motor vehicle and parts dealers rose 1.5% in September, while sales at gasoline stations increased 0.2%.

In volume terms, retail sales were up 1.1% in September.


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Retail sales ‘hit a wall’ in July after two months of significant gains

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Retail sales in Canada “hit a wall” in July after big gains in May and June, a sign that the economic recovery could be slow and bumpy.

Statistics Canada said Friday overall retail sales in July rose 0.6% to $52.9 billion, helped by higher sales at motor vehicle and parts dealers and gasoline stations, after posting gains of more than 20% in both May and June.

However, core retail sales, which exclude those two sectors, fell 1.2% in July, with building material and garden equipment sales dropping 11.6%. Core retail sales were up 10.8% in May and 14.1% in June.

“It looks like retail sales hit a wall in July,” CIBC senior economist Royce Mendes said. “It’s a pretty sharp pullback after some explosive growth in retail spending in June.”

Economists had expected an increase of 1.0% for the month, according to financial markets data firm Refinitiv.

Sales were up in six of 11 subsectors in July, the agency said, with the motor vehicle and parts dealers subsector contributing the most to the increase with a 3.3% increase. Sales at gasoline stations rose 6.1%.

Robert Carter, industry adviser with StratonHunter Group, said the surge in gasoline sales could be explained in part by “staycations.”

“As the economy opened up and people could move around, there were a lot of staycations,” he said.

Carter said the uptick in vehicle sales is likely due to improved household savings and pent-up demand.

“People may have felt they had a little bit of extra income to buy that vehicle that they were putting off.”

Meanwhile, sales at food and beverage stores dropped 2.1% in July, potentially the result of stockpiling in previous months, Carter said.

“People probably had a higher inventory of products in their houses than they historically would have,” he said. “I think that resulted in a bit of softening in the general household spending category.”

Retail Council of Canada president and CEO Diane J. Brisebois said the latest figures show the retail recovery is slowing.

“The July numbers continue to reflect the many challenges facing retailers during this pandemic,” she said in a statement.

“We can presume that the June numbers released by Statistics Canada last month included some pent-up demand for various products and so the July numbers really present a more accurate state of Canadian retail.”

Mendes said the slowdown could be explained by a shift in spending towards the service sector.

“It’s possible that households actually just tilted some of their spending away from goods and back towards services,” he said, noting that consumers may have spent more on eating at a restaurant or going for a haircut.

A preliminary estimate for August suggested that retail sales increased by 1.1%, by Statistics Canada also said Friday.

Going forward, Mendes said the “recuperation phase” of reopening after COVID shutdowns will likely be slower and rockier, as predicted by the Bank of Canada.

He said ongoing restrictions and household cautiousness will likely lead to slower growth in the coming months.

While BMO chief economist Douglas Porter agreed retail figures will continue to be more subdued in the coming months, he said the latest numbers also included many positives – most importantly the preliminary estimate for August.

“It’s almost comforting to see an economic report that is somewhat back to `normal’ in today’s moderate retail sales gain,” he said in a note to clients.

“While the headline gain was a bit shy of expectations, the much bigger and more important picture is that retail and wholesale activity just carved out perfect V-shaped rebounds.”


Statistics Canada says retail sales plunged 26.4% in April

Retail sales fell by more than a quarter in April due to the COVID-19 pandemic, but Statistics Canada said Friday that they regained some of the lost ground in May.

The agency said retail sales plunged by a record 26.4% to $34.7 billion in April leaving them down 33.6% since physical distancing measures were implemented in mid-March.

However, Statistics Canada said early estimates suggest retail sales rose 19.1% in May.

Economists on average had expected a drop in April of 15.1%, according to financial markets data firm Refinitiv.

Bank of Montreal chief economist Doug Porter said April is cementing its reputation as the worst month for the Canadian economy ever.

“The Canadian economy, and retail trade specifically, looks to have been hit even harder than initially estimated as well as the U.S. economy through the shutdowns,” Porter wrote in a note.

“It’s a long road back from these April lows.”

While essential services like grocery stores remained open, most retailers did not offer in-store shopping in April due to public health restrictions meant to slow the spread of the pandemic.

However, many retailers started or expanded their online presence and curbside pick-up services in response to the closures.

Statistics Canada says online sales surged to a record high, representing 9.5% of the total retail market.

TD Bank economist Ksenia Bushmeneva said while spending is expected to begin to rebound in the coming months, the “where’s and what’s” of consumer spending is likely to differ from the pre-pandemic time.

“As we have highlighted in our recent report, consumer spending patterns have undergone quite the transformation in recent months.

“As expected, consumers are spending considerably less on travel and lodging, eating out, gasoline and clothing, but considerably more on home renovation and food. Online shopping also continues to rule the day, remaining far more prevalent than it was prior to the health crisis.”

Sales were down in all 11 subsectors in April, while motor vehicle and parts dealers took the largest hit in dollar terms as the sector fell 44.3% for the month.

Sales at food and beverage stores fell 12.7% as supermarkets and other grocery stores saw a drop of 12.0% compared with March when Canadians stocked up.

Retail sales in volume terms fell a record 25.2% in April, following an 8.2% drop in March, leaving them down 31.3% since the onset of the pandemic

 


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Canadian retail sales fell 10% in March, April expected to be worse

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Statistics Canada says retail sales in Canada posted their biggest monthly decline on record in March and warned that the drop for April will eclipse that loss.

The agency says retail sales fell 10.0% to $47.1 billion in March as non-essential businesses began to shut their doors mid-month due to the pandemic.

The drop was in line with economists’ expectations of 10 per cent, according to financial markets data firm Refinitiv.

Statistics Canada also says a preliminary estimate for April indicates a 15.6% drop for the first full month of the pandemic.

The March decline came as sales plunged at motor vehicle and parts dealers, clothing and clothing accessories stores and gasoline stations, while sales at grocery stores soared.

Excluding motor vehicle and parts dealers, retail sales were down 0.4% for the month.


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Statistics Canada says retail sales fell 0.1% in September

Retail sales fell 0.1% in September to $51.6 billion, weighed down by lower sales at motor vehicle and parts dealers and gasoline stations, Statistics Canada said Friday.

The result matched the expectations of economists, according to financial markets data firm Refinitiv.

“All told, the Canadian consumer continues to look a bit tired, and the broader economy remains on pace for slightly below potential growth in the near term,” said Robert Kavcic, a senior economist at the Bank of Montreal.

The overall decline came as sales in the motor vehicle and parts dealers subsector fell one% due to a 1.9% drop at new car dealers. Sales at gasoline stations fell 2.3%, due in part to lower prices.

Statistics Canada says excluding these two subsectors, retail sales rose 0.7%.

“The ongoing strength in Canadian labour markets, the recent momentum in housing markets and wages, and the downshift in borrowing rates may have provided a modest lift to consumer spending,” TD Bank economist Omar Abdelrahman wrote in a report.

“Still, elevated household debt levels and associated debt-servicing costs will continue to cap any meaningful acceleration in retail sales or consumer spending.

Sales at food and beverage stores rose 1.2%, boosted by a 1.1% increase at supermarkets and other grocery stores and a 3.2% increase at beer, wine and liquor stores. Building material and garden equipment and supplies dealers saw sales rise 3.3%.

Overall retail sales in volume terms fell 0.1%.

The retail sales figures come ahead of wholesale trade results for September to be released on Monday and a reading of gross domestic product for both September and the third quarter as a whole out on Nov. 29.

The Canadian economy set a blistering pace in the second quarter, but economists expect growth slowed in the third quarter amid evidence of a slowing global economy, hurt by the U.S.-China trade war.


Statistics Canada reports retail sales edged down 0.1% in August

Statistics Canada says retail sale fell 0.1% in August to $51.5 billion as sales at food and beverage stores dropped.

Economists on average had expected an increase of 0.4% for August, according to financial markets data firm Refinitiv.

Statistics Canada says sales at food and beverage stores fell 0.8% in August, the first move down from the sector in three months. Sales at supermarkets and other grocery stores fell 0.8%, while beer, wine and liquor stores dropped 1.9% and convenience stores edged down 0.1%. Sales at specialty food stores increased 2.3%.

Meanwhile, sales at gasoline stations fell 0.4% as a result of lower prices at the pump, while gasoline sales rose 2.8% in volume terms.

Sales at general merchandise stores gained 0.8% and motor vehicle and parts dealers rose 0.1%.

In volume terms, retail sales increased 0.2% in August.