2024-11-22 16:40:00
(Ottawa) Retail sales increased 0.4% to reach 66.9 billion in September in the country, thanks to gains made by supermarkets and other grocery stores, Statistics Canada said Friday.
The agency also said its forward estimate of retail sales for October suggests they rose 0.7%, although it warned the figure could be revised.
“Canadian consumers appear to have found their feet in the second half of the year, benefiting from slower inflation and lower interest rates,” wrote BMO economist Shelly Kaushik. in a report.
The Bank of Canada has cut its key rate four times this year, bringing it down to 3.75%. These reductions come as the annual pace of inflation slowed to 2.0% in October.
Statistics Canada reported that sales at food and beverage retailers rose 3% for the month.
The subsector’s increase came as supermarkets and other grocery retailers, excluding convenience stores, grew 3.3% and sales at beer, wine and spirits retailers increased. increased by 4.4%.
At the same time, sales at gas stations and fuel merchants fell by 2.3%, while volume sales increased by 3.2%.
Automotive vehicle and parts dealers saw their sales fall 0.7% in September.
Core retail sales, which exclude gas stations and fuel sellers as well as automobile vehicle and parts dealers, advanced 1.4% in September. Expressed in volume, retail sales increased by 0.8% in September.
In Quebec, retail sales increased by 0.6% in September.
In fact, they increased in five provinces in September, with the largest provincial increase observed in Alberta, at 2.3%. In Ontario, sales fell 0.1%.
In New Brunswick, retail sales fell 0.7% in September, while they also fell 0.1% in Nova Scotia. They remained stable in Newfoundland and Labrador, while they increased by 1.5% in Prince Edward Island.
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How do lower interest rates impact consumer spending and the overall economy, according to Shelly Kaushik?
**Interview with Shelly Kaushik, BMO Economist**
**Interviewer:** Welcome, Shelly. Thank you for joining us today. Recent reports indicate that retail sales in Canada have seen a significant increase. Can you give us your insights on the latest statistics and what they imply about consumer behavior?
**Shelly Kaushik:** Thank you for having me. Yes, the new data from Statistics Canada shows that retail sales increased by 0.4% in September, reaching 66.9 billion dollars, largely thanks to gains from supermarkets and grocery stores. This is an encouraging sign, especially as we look at the overall consumer spending trends.
**Interviewer:** That’s interesting. The report also suggests that retail sales could rise by 0.7% in October. What factors do you think are driving this growth?
**Shelly Kaushik:** A couple of key factors are contributing to this growth. Firstly, we’ve observed a marked decrease in inflation rates, currently at 2.0%, and coupled with lower interest rates—after four cuts by the Bank of Canada this year—consumers seem to be regaining confidence. This has particularly influenced their spending in the second half of the year.
**Interviewer:** Speaking of the Bank of Canada, how do these interest rate cuts typically influence consumer spending and the economy overall?
**Shelly Kaushik:** Lower interest rates usually lead to cheaper borrowing costs, which can stimulate consumer spending. When people find loans and mortgages more affordable, they’re more likely to make significant purchases, leading to increased retail sales. It’s a cycle that can foster economic growth over time.
**Interviewer:** We’ve seen specific increases in sales at food and beverage retailers, with a notable 3% rise. What might explain this trend?
**Shelly Kaushik:** The increase in sales at food and beverage retailers could be attributed to a few factors—first and foremost, the continuing demand for necessities like groceries. Moreover, as consumers have more disposable income due to lower inflation, they may be more willing to spend on higher-quality food options and dining experiences.
**Interviewer:** Thank you, Shelly, for your insights. It seems like there’s a cautiously optimistic view on Canadian consumer spending as we move into the end of the year.
**Shelly Kaushik:** Absolutely. While it’s important to remain vigilant about potential revisions in these projections, the current trends are certainly promising for the Canadian economy.
**Interviewer:** Thank you again for your time, Shelly. We look forward to your continued analysis as these trends develop.
**Shelly Kaushik:** Thank you! It was a pleasure discussing these insights with you.
