Retail Sales Decline but Volumes Edge Up
October 22, 2019
Focus Area—Canadian Economics
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.
- 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.
Senior Economist I