2023-09-22 13:40:16
(Ottawa) Sales at Canadian retailers rose slightly in July, fueled by sales at supermarkets and grocery stores, but Statistics Canada said Friday that its first estimates for August pointed to a decline.
According to the federal agency, retail sales advanced 0.3% to 66.1 billion in July, while those of food retailers climbed 1.3% for the month.
Katherine Judge, senior economist at CIBC, said the increase in spending at grocery stores might be a sign that households have chosen to eat out less, due to rising interest rates and prices.
“This casts doubt on the idea that services consumption can offset the weakness in goods consumption at the start of the third quarter,” she observed.
Statistics Canada indicated that its first estimates for the month of August suggested a drop in retail sales of 0.3% for this month – although warning that this figure would necessarily be revised by its official publication, in a month .
Mme Judge added that the August preliminary reading might have been affected by the wildfires.
“But even accounting for a rebound in September, real retail sales appear to be down 2.5% to 3.5% annualized in the third quarter. A second consecutive quarter of weakness suggests that consumer spending will be weak in the gross domestic product (GDP) figures for the third quarter. »
Furthermore, although the Bank of Canada will have to assess how much of the decline in retail trade was attributable to strikes at British Columbia ports and wildfires, this is consistent with the idea that the economy is weak enough to that the central bank keeps its rates unchanged, underlined Mme Judge.
Retail sales increased in seven of nine subsectors in July, and spending was more widespread than the previous month.
Core retail sales — which exclude gas stations and fuel dealers and motor vehicle and parts dealers — increased 1.3% in July.
Sales at food retailers rose 1.3%, supported by a 1.5% increase at supermarkets and other grocery stores, excluding convenience stores, and a 1.3% increase among beer, wine and spirits retailers.
Sales at general merchandise retailers increased 1.8%.
The biggest decline was seen at auto vehicle and parts dealers, whose sales fell 1.6% — their first decline in four months. Sales at new car dealers fell 1.7% and those at used car dealers fell 3.1%. Retailers of motor vehicle parts, tires and accessories saw their sales increase by 1.0%.
Mme Judge noted that these results followed a series of significant gains for auto dealers. Supply chains have normalized, allowing the industry to catch up with pent-up demand.
Sales at gas stations and fuel merchants also lost 0.7%. Expressed in volume, they decreased by 1.0%.
Taken overall and expressed in volume, retail sales decreased by 0.2% in July, Statistics Canada said.
Overall, argued Mme Judge, the retail report indicates that consumer vigor continued to decline in the third quarter.
“We expect the unemployment rate to rise further in the future and, combined with the impact of mortgage renewals at higher interest rates, this will add pressure on consumption, which will likely convince the Bank of Canada to take a break for the rest of this year. »
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