Canada’s holiday sales period got under way in November with a 0.2% decline in retail sales led by falling purchases at food and beverage retailers. The data released by Statistics Canada revealed November’s retail sales amounted to $66.6-billion, lower than many economists had expected.

Shelly Kaushik, an economist with BMO Capital Markets, declared the month a “Black Friday bust… The headline drop in retail sales was disappointing,” she wrote in a note to clients. “Weak sales volumes point to an economy that remained at a standstill in November as consumers continue to adjust to a higher interest rate environment.”

Core retail sales, which exclude gas stations, fuel vendors and motor vehicle and parts dealers, were down 0.6 per cent in the month.

“The decrease in grocery store sales wasn’t a prices story, but could possibly reflect consumers substituting towards lower-priced brands at stores, as grocery store prices are generally still rising uncomfortably fast,” said Katherine Judge of CIBC Capital Markets in a note.

Ms. Judge took the data to mean that “Canadian consumers are increasingly struggling with higher interest rates.” Rates remained high throughout 2023 as the Bank of Canada carried out hikes to attempt to get inflation down to its 2% target, but the high rates have weighed on some purchasing decisions.

Along with categories such as grocery and general merchandise, Ms. Judge pointed out that sales were down in online shopping – a key measure of discretionary spending.

On a seasonally adjusted basis, retail e-commerce sales were down 1.5% to $3.9-billion in November, accounting for 5.8% of total retail trade, compared with 5.9% in October, Statistics Canada said.

Ahead of the holiday period, Deloitte predicted the average Canadian shopper would spend $1,347 on purchases across the festive season, down 11% from 2022. Roughly half of the more than 1,000 Canadians the consultancy company surveyed planned to buy only what their family needs this past holiday season. 71% said they would seek items on sale and 29% seek less expensive retailers to shop at.

The country will get a better look at how accurate such data when Statistics Canada releases December’s retail sales figures. The agency’s early estimate for the month suggests sales increased 0.8%, but it warned the figure would be revised. Despite the advance estimate showing a rise in sales, Ms. Judge said, “we expect that strength to be fleeting given the weakening labour market and the impact of higher interest rates on spending.”

Source: Globe and Mail
Source: The Star
Source: Financial Post


Retail Trade, November 2023

Retail sales decreased 0.2% to $66.6 billion in November. Sales were down in four of nine subsectors and were led by decreases at food and beverage retailers (-1.4%). Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—were down 0.6% in November. In volume terms, retail sales decreased 0.2% in November.

Core retail sales decline

Core retail sales decreased 0.6% in November, led by lower sales at food and beverage retailers (-1.4%) and general merchandise retailers (-1.8%). Sales at food and beverage retailers were down on lower sales at supermarkets and other grocery retailers (except convenience retailers) (-1.6%) and beer, wine and liquor retailers (-3.3%). Building material and garden equipment and supplies dealers also declined (-0.1%).

The largest increase to core retail sales in November came from clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (+1.5%).

Sales down in five provinces

Retail sales decreased in five provinces in November. The largest provincial decrease was observed in Quebec (-1.4%). In the census metropolitan area of Montréal, sales were down 0.9%. In Saskatchewan, retail sales decreased 2.2% in November, led by lower sales at general merchandise retailers.

The largest provincial increase in retail sales in November was observed in British Columbia (+0.7%). The increase was led by higher sales at motor vehicle and parts dealers.

Retail e-commerce sales in Canada

On a seasonally adjusted basis, retail e-commerce sales were down 1.5% to $3.9 billion in November, accounting for 5.8% of total retail trade, compared with 5.9% in October.

Advance retail indicator

Statistics Canada is providing an advance estimate of retail sales, which suggests that sales increased 0.8% in December. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 49.4% of companies surveyed. The average final response rate for the survey over the previous 12 months was 88.1%.

Source: Statistics Canada