Retail Sales Decline but Volumes Edge Up

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Ottawa, October 22nd, 2019—The Conference Board of Canada’s Senior Economist Christopher Heschl offers the following insights on today's release of data on retail trade:

Today’s Statistics Canada release showed retail sales declined by a slight 0.1 per cent in August. This marks the fourth contraction of the year but comes on the heels of a 0.6 per cent gain in July. Sales fell in six subsectors, with sales at food and beverages stores down 0.8 per cent following back-to-back gains in June and July. In contrast, after adjusting for inflation, total sales volumes rose for the third month in a row in August, climbing by 0.3 per cent over July and 0.5 per cent on a year-over-year basis. Although high household debt will continue to constrain consumer spending, recent strong job and wage gains should support moderate retail trade growth in the near term.

Insights

  • In August, retail sales fell by a slight 0.1 per cent after a 0.6 per cent gain in July.
  • Sales fell in 6 of 11 subsectors, with sales at food and beverage stores declining by 0.8 per following back-to-back gains in June and July.
  • Cannabis stores continue to perform well, with sales rising by 18.6 per cent in August—the second double-digit increase in a row and the fifth in six months.
  • In total, retail sales were up 1.1 per cent compared to August 2018.
  • After taking into account price changes, total sales volumes climbed by 0.3 per cent in August and 0.5 per cent on a year-over-year basis.
  • Sales volumes at gasoline stations rose 2.8 per cent but fell by 0.4 per cent in nominal terms due to lower prices at the pump.
  • Sales fell in four provinces, with Ontario and Manitoba posting the largest declines. Meanwhile, sales rebounded in British Columbia and New Brunswick following contractions in July.
  • Retail sales shrank in all three census metropolitan areas. In August, sales fell 1.5 per cent in Toronto, 1.3 per cent in Vancouver, and 0.1 per cent in Montreal.
  • Overall, retail trade is anticipated to expand at a healthy pace in Montreal and Toronto this year while declining slightly in Vancouver as a result of high household debt and a cooler housing market.

Christopher Heschl

Senior Economist I

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