According to Statistics Canada’s latest report, Canadian retail sales rose by 0.4 percent in August, driven primarily by higher sales at motor vehicle and parts dealers. However, this increase was lower than the projected headline gain of 0.5 percent.
Sales Reach $66.6 Billion, But Core Retail Measures Look Less Impressive
Total sales increased to $66.6 billion, but were up in only four of the nine subsectors. Motor vehicle and parts dealers led substantially with a 3.5 percent increase, with sales of new cars up 4.3 percent and used cars up 2.1 percent.
Provincial Breakdown: Ontario Sees Largest Increase
Ontario had the largest provincial increase with a 0.9 percent rise, mainly attributed to auto sales. In Toronto, sales rose 0.6 percent.
Core Retail Sales Decline Without Motor Vehicle and Parts Dealers
Without motor vehicle and parts dealers, core retail sales actually decreased for the first time in three months, dropping to 0.4 percent in August. This decline was led by lower food and beverage sales, which were down 1.5 percent.
Alberta Hit Hard by Decline in Food and Beverage Sales
Alberta was the province most affected by the decline in food and beverage sales, which dropped by 1.1 percent.
Sales of Building Materials and Garden Equipment Continue to Decline
Sales of building material, garden equipment and supplies declined for the second consecutive month. This downward trend will harm residential investment, noted Bradley Saunders, assistant economist at Capital Economics.
Core Retail Categories with Largest Increase in Sales
The core retail categories that had the largest increase in sales in August were sporting goods, hobby, musical instrument, book, and miscellaneous, which rose 0.9 percent.
Experts Weigh In
Andrew Grantham, Senior Economist at Canadian Imperial Bank of Commerce
"While Canadian retail sales posted a further solid headline gain in August, the advance was largely driven by often volatile auto sales and core measures looked much less impressive," said Andrew Grantham, senior economist at Canadian Imperial Bank of Commerce.
