Retail outlook not stable for remainder of 2011: study

Two normally stable retail categories–supermarkets and health and personal care stores–both recorded unusual lows in sales growth in the second quarter, according to the Major Market Retail Report by research firm KubasPrimedia.

In the second quarter, supermarket sales were down 0.8 per cent over the same time last year, while health and personal care store sales were off 1.4 per cent.

Meanwhile, general merchandise store sales gained 4.3 percent in the second quarter.

The report says the food and drug sector is likely to return to more normal growth in the second half as gasoline prices stabilize, freeing up consumer dollars that had been going to fill up the tank.

Total retail in 2011 is projected to show a 4.2 per cent gain over 2010. That's less, however, than the 5.5 per cent jump recorded last year.

But Ed Strapagiel, executive vice-president of KubasPrimedia, said the retail situation in Canada remains sluggish. “The most likely scenario is still for slow improvement in both countries (U.S. and Canada). This is what we expected at the start of the year, but there have been a few bumps on the road.”

If there's good news it's that 2012 is looking brighter. Strapagiel predicts that retail sales will rise 5.2 per cent, with supermarkets and food and drug showing improvements as well.  

The Major Market Retail Report 2011 is an analysis of retailer performance and competitive position that covers 147 Canadian retailers both overall and across 33 individual product categories.