Supermarket sales fall flat in March

Sales at food and beverage stores in Canada fell slightly in March, down 0.1 per cent to $8.99 billion, according to the latest figures from Statistics Canada.

Supermarkets saw no growth in March compared to February, with sales flat at $6.36 billion.

Convenience stores and specialty food stores experienced slight growth of 0.2%, to $553 million and $458 million respectively.

Beer, wine and liquor stores saw a 0.3% decline in sales, to $1.62 billion.

The lack of growth at food and beverage stores was mirrored by overall sluggishness in the retail sector.

Total retail sales–everything from furniture to auto sales–saw no growth from February to March. Sales for March were $39.45 billion.

Statistics Canada said that after removing the effects of price changes, particularly lower gasoline prices, retail sales in volume terms rose 0.7%.

``Challenged by sluggish income gains and unwilling to significantly grow non-mortgage debt, Canadians have been reluctant spenders at the stores of late,'' CIBC chief economists Avery Shenfeld said in a note. ``But a big drop in gasoline prices enabled retail volumes to jump...despite an overall flat level of expenditures.''

The largest increase in sales was a 3.1% rise at clothing and clothing accessories stores, while sales at motor vehicle and parts dealers rose 0.7% for a third consecutive monthly gain.

Gasoline station sales decreased 1.3% in March, mainly reflecting lower prices at the pump.

Statistics Canada said higher sales were reported in six of 11 retail sectors, representing 47% of total retail sales.

Retail sales rose in six provinces in March, with Ontario reporting the largest increase of 0.4% in dollar terms.

TD Bank economist Dina Ignjatovic said the increase in first-quarter retail sales from the end of last year will help boost GDP for the quarter.

``Indeed, consumer spending is now tracking 2.0% in Q1, which will help lift real GDP to the 2% to 2.5% range during the quarter,'' Ignjatovic wrote. ``Going forward, consumer spending growth is likely to remain just shy of 2%, as employment growth is expected to be lacklustre and households work to rein in their debt.''

Year-over-year, food and beverage sales (March 2013 over March 2012) were up 1.6 per cent, led by a 5% gain at specialty food stores.

Supermarket sales were up 1.6 per cent compared to March a year ago, while booze stores saw a 2.8% rise in sales.

Convenience store sales, meanwhile, have fallen 4.4% in the past year.