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01/20/2023

Canadian retail sales fell 0.1% to $61.8 billion in November

Sales food and beverage stores were down 1.6%, according to Statistics Canada

Canadian retail sales edged down in November amid a broad consumer spending pull back as the rising cost of living continued to erode purchasing power.

Statistics Canada said Friday retail sales dropped 0.1% to $61.8 billion in November.

While the decrease wasn't as pronounced as expected the agency's early estimate for the month predicted a 0.5% drop other measures show a bigger drop.

Retail sales in volume terms, which measures the quantity of goods sold and controls for price changes due to inflation, decreased 0.4% in November.

Core retail sales, which exclude gasoline stations and motor vehicle and parts dealers, dropped 1.1% the largest decline in 11 months.

Still, the federal agency's early estimate for December suggests retail sales rebounded slightly up 0.5% for that month, though it cautioned the figure would be revised.

"Canadian consumers continue to prove resilient in the face of aggressive rate hikes,'' BMO economist Shelly Kaushik said in a client note.

"Retail sales came in better than expected in November, with the headline decrease helped by higher prices as volumes posted a larger drop.''

Meanwhile, retail sales decreased in six of 11 subsectors, representing 47.4% of retail trade, Statistics Canada said.

The decrease was led by lower sales at building material and garden equipment and supplies dealers, down 3.8% from the previous month, and food and beverage stores, down 1.6%.

Supermarkets and other grocery stores, excluding convenience stores, saw sales slump 1.3% in November -- a month when prices of food purchased from stores rose 11.4% on a year-over-year basis, the agency said.

Sales at general merchandise stores fell 0.8%, a significant drop given one of the largest shopping events of the year Black Friday is in November.

Retail e-commerce sales were down 2.7% in November on a seasonally adjusted basis.

Sales were up 1.4% at motor vehicle and parts dealers in November, led by higher sales at new car dealers up 1.2% the fastest pace of growth since June 2022.

The increase followed higher imports of motor vehicles and parts in the second quarter of 2022.

Sales at gas stations were up 2.2% in November, though in volume terms sales were up 3.7%.

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