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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 preps new online inflation tool to better detail price impacts

The national statistics agency is readying a new online tool designed to help Canadians track the impact of price changes on their spending during the pandemic.

Statistics Canada already has a visualization tool that allows users to see the changes in prices for goods that make up the country’s headline inflation number.

A senior official with the agency says the next step is to let individuals put in their own spending patterns to generate a consumer price index unique to themselves so they can better see themselves in the data the agency collects.

Assistant chief statistician Greg Peterson says the online tool is still a work in progress, but meant to address a gap between official measurements of inflation and consumers’ price perceptions.

Inflation rates collapsed as economic restrictions were put in place earlier this year to curb the spread of COVID-19, and price increases overall are expected to stay low through next year.

But consumer perceptions suggest a belief that prices are rising as Canadians buy more things that are rising in cost like food, and less of goods whose prices have declined such as gasoline.


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Results from Canadian Tobacco and Nicotine Survey now include vaping

Screen Shot 2019-05-08 at 3.17.42 PMEight out of 10 Canadians who are vaping are vaping nicotine, according to a new survey from Statistics Canada.

The latest annual Canadian Tobacco and Nicotine Survey, published in March, aims to gather information about the prevalence of cigarette smoking, vaping and cannabis use.

For the first time ever, the survey included questions about vaping in an effort shed light on the types of products Canadians are using, how often they are vaping and their reasons for doing so. This report, the first to track detailed information about vaping in this country, defines it as the “act of inhaling and exhaling vapour produced by a device such as an electronic cigarette (e-cigarette), vape mod, vaporizer or vape pen.”

The study recognized that “while some use these devices to curtail or to quit smoking,” it went on to point out “vaping can also have negative effects, particularly among youth.”

The report revealed that among those who had vaped in the 30 days preceding the survey, about 8 in ten indicated that they had vaped nicotine. This proportion was even higher among users aged 15 to 19 (87%) and those aged 20 to 24 (86%).

In addition, about one in 10 users aged 15 to 19 and aged 20 to 24 reported that they once tried a vaping device without knowing whether or not it contained nicotine.

Frequency of vaping also varied across age groups. Among users aged 15 to 19, 31% vaped on a daily basis, compared with 38% of those aged 20 to 24, and more than half of those aged 25 and older.

Other highlights:

  • In 2019, 15% of teenagers aged 15 to 19 reported having vaped in the 30 days preceding the survey, and over one-third (36%) reported having tried it at some point in their lives.
  • Among young adults aged 20 to 24, the proportion of those who had vaped in the 30 days preceding the survey was also 15%, and close to half (48%) said that they had tried it at some point.
  • In comparison, less than 3% of adults aged 25 and older reported using a vaping product in the 30 days preceding the survey, and 12% indicated that they had tried vaping at some point.
  • For both men and women, the proportion of those who used a vaping device in the 30 days preceding the survey was higher in younger age groups. In general, men are more likely than women to vape.

Reasons for vaping varied by age group and users were classified across the following categories: (1) those who just wanted to try; (2) those who reported enjoying it; (3) those who vaped to reduce stress; (4) those who vaped to reduce or quit smoking; and (5) those who mentioned other reasons.

Among users aged 15 to 19, the most common reasons were “because they wanted to try” (29%) and “because they enjoyed it” (29%). About one in five (21%) said that they vaped to reduce stress, while 9% said that they did so to quit or cut down on smoking.

Among those aged 20 to 24, the proportion who vaped because they wanted to quit or cut down on smoking was higher (28%). However, similar to their teenaged counterparts, more than one-quarter (27%) of users in this age group reported vaping just because they wanted to try it.

Among those aged 25 and older, by contrast, users were significantly more likely than younger users to report having vaped in an effort to reduce or quit smoking, with more than half of those aged 25 and older citing this as their main reason.

Perception of harm

Among those who had vaped in the 30 days preceding the survey:

  • 60% believed that vaping products were less harmful than cigarettes
  • 20% thought that they were similarly harmful
  • 9% felt they were more harmful, and 10% said that they did not know

Among those who had never vaped:

  • 13% perceived vaping as less harmful than cigarettes
  • 33% felt both were equally harmful
  • 23% thought that vaping was more harmful
  • 31% did not know

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Statistics Canada says retail sales rose 0.9% in November

Screen Shot 2019-11-26 at 9.54.04 AMCanadian retail sales bounced back in November, boosted by gains in the auto sector.

Statistics Canada said Friday retail sales rose 0.9% for the month, largely offsetting a revised 1.1% decline in October. The initial report for October had been a drop of 1.2%.

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

TD Bank economist Omar Abdelrahman said the report came after a recent string of disappointing Canadian economic data and a lacklustre year for Canadian retail sales.

“However, one month of data doesn’t make a trend, and it is important to note that the headline print was disproportionately driven by a bounce back in auto sales,” Abdelrahman wrote in a brief report.

Excluding motor vehicle and parts dealers, retail sales were up 0.2% for the month. Economists on average had expected an increase of 0.4%, excluding autos, according to Refinitiv.

“We still expect a tepid performance for the Canadian economy in the fourth quarter,” Abdelrahman wrote.

The Bank of Canada kept its key interest rate on hold earlier this week, but left the door open to future rate cuts amid concerns about economic growth this year.

The central bank estimated the economy slowed to an annual growth rate of 0.3% in the fourth quarter, but predicted a rebound to about 1.3% annual rate in the first quarter of 2020.

Governor Stephen Poloz said the central bank will be paying particular attention to developments in consumer spending, the housing market and business investment.

Statistics Canada said Friday that retail sales were up in six of 11 subsectors tracked by Statistics Canada, representing 70% of retail trade.

The motor vehicle and parts dealers subsector gained 3.0%, led primarily by sales at new car dealers.

Food and beverage stores saw sales rise 0.9%, while building material and garden equipment and supplies dealers reported an increase of 2.1%.

However, furniture and home furnishing stores saw a drop of 0.8%, while clothing and clothing accessories stores fell 1.7%. General merchandise stores lost 0.8%.

Overall retail sales in volume terms increased 0.7% in November.