Retail sales rise in July, but volumes flat
September 20, 2019
Focus Area — Canadian Economics
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 increased by 0.4 per cent in July. This was the first advance in three months following contractions of 0.2 per cent in May and 0.1 per cent in June. Sales rose in most subsectors, with motor vehicles and parts dealers posting a gain of 1.5 per cent cent—their largest increase since February. Meanwhile, the burgeoning cannabis industry reached a milestone as sales topped $100 million for the first time. After adjusting for inflation, however, total sales volumes were unchanged compared to the previous month, as well as on a year-over-year basis. Looking ahead, the tug-of-war between recent solid job and wage gains and high household debt will continue, suggesting that consumer spending will grow at a moderate pace over the near term.
- In July, retail sales advanced by 0.4 per cent—the first increase in three months.
- Retail sales rose in 6 of 11 sectors, with sales at motor vehicle and parts dealers rising by 1.5 per cent thanks largely to higher sales at new car dealers.
- With an increase of 14.3 per cent supported by widespread gains across provinces, sales at cannabis stores topped $100 million for the first time.
- On a year-over-year basis, retail sales were up 1.2 per cent.
- After adjusting for inflation, retail sales in volume terms remained unchanged over June 2019 and over July 2018.
- Sales rose in six provinces, with Ontario and the Prairie provinces posting the largest increases. Québec and British Columbia both reported declines despite gains in each of their largest cities.
- All three census metropolitan areas saw an increase in sales. Monthly sales rose 1.1 per cent in Toronto and 0.5 per cent in each of Montreal and Vancouver.
- Overall, retail sales in Montreal and Toronto are anticipated to grow at a healthy pace in 2019, while sales in Vancouver are on track to see a slight decline as consumers have curbed spending in the face of high household debt and a cooler housing market.