Canada’s Retail Trade Industry: Industrial Outlook Autumn 2005

Retail trade profits are poised to reach a new high of $9.5 billion this year, surpassing last year’s record $9.1 billion.

Profits have been strong despite weak price growth, in part because the rise in the value of the Canadian dollar kept cost growth in check for some stores, including those that sell clothing and general merchandise. Easy credit and the housing boom have also helped boost sales for furniture, home furnishings, electronics and appliance stores.

But profits are starting to ease. Both dollar profits and margins will fall in the near term, as competitive pressures ensure that most of the recent cost savings are passed on to the consumer. Still, sturdy growth in unit sales and improved price growth are expected to keep revenues expanding throughout the outlook period. By 2008, profits will reach a new record and then continue to grow into 2009.