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The Daily. Wednesday, December 20, 2000

Retail trade

Retail sales declined 0.9% in October to $23.3 billion, leaving sales slightly below their July level. The October decline followed a 0.4% gain in September and unchanged sales in August. In constant dollars, retail sales fell 0.5% in October compared with September.

The strong gains in retail sales in the May-to-July period were followed by weaker sales in recent months. In the first four months of 2000, retailers saw volatile sales after a year of strong increases in 1999. Retail sales for the first 10 months of 2000 were 6.3% higher than in the same period of 1999. This compares with a 5.4% increase for the first 10 months of 1999.

Excluding sales by motor and recreational vehicle dealers, total retail sales advanced 0.9% in October. Lower sales by motor and recreational vehicle dealers led to declines in all provinces. Clothing stores and furniture stores joined the automotive sector in reporting lower sales.

General merchandise stores (+3.1%), which showed the strongest sales gain in October, reported important declines in the previous two months. Also, stores classified as other retail (+0.9%) and food stores (+0.6%) reported advances, after virtually unchanged sales in September. The other retail category includes liquor stores, sporting goods stores, hardware stores and bookstores. Drug stores was the only sector to report significant back-to-back increases in September (+1.0%) and October (+0.5%).

Auto sector posted its largest sales decline in a year

Retailers in the automotive sector posted a 3.3% sales decrease in October, after five consecutive monthly gains that ranged from 0.5% to 1.9%. The October decline in the auto sector resulted from a 5.8% drop in sales by motor and recreational vehicle dealers.

With the exception of October's decline, sales in the automotive sector had been advancing strongly since the spring, after some volatility at the start of 2000. Prior to this year, retailers in this sector saw a period of strong increases that started in the fall of 1998. Motor and recreational vehicle dealers, the largest component of the auto sector, experienced strong sales in the spring and summer of 2000 by making extensive use of attractive financing and large cash rebates. However, reduced incentives at both the start of and in the early fall of 2000 resulted in weaker sales gains in this period.

Lower prices for women's clothing contributed to about half of October's 1.4% sales decline in the clothing sector. This follows a 3.5% sales increase in September, which was partly owing to a significant price increase. All types of stores in the clothing sector reported lower sales in October. Retailers in the clothing sector have seen strong sales since the fall of 1999, after a period of slower growth in the spring and summer of that year.

Consumers returned to general merchandise stores in October and increased their purchases by 3.1% compared with September. This gain completely offset the declines reported in September (-1.1%) and August (-1.7%). These declines were partly attributable to lower sales of big ticket items. Sales in general merchandise stores have generally been increasing since early in the spring, following a period of volatility that began in the summer of 1999.

Retail sales down in all provinces

Lower sales by motor and recreational vehicle dealers in October affected retail trade in all provinces. Retail sales in New Brunswick (-2.7%), Prince Edward Island (-2.6%), Saskatchewan (-1.7%), Nova Scotia (-1.6%), Alberta (-1.3%) and British Columbia (-1.1%) were down by at least 1.0% in October.

October's sales declines in Ontario (-0.9%) and Quebec (-0.2%) essentially offset their respective increases reported in the previous month. Ontario's decline came after five consecutive monthly gains. In Quebec, retail sales have shown little progress since the increases of 2.7% in July and 1.6% in June. Quebec retailers saw a period of volatile sales in the first half of 2000. Retail sales had generally been rising since the summer of 1996 in Ontario and since the summer of 1998 in Quebec.

Related indicators for November

Total employment advanced 0.4% in November compared with October. This increase marked a fourth consecutive monthly gain in employment after the slight declines observed in July and June. Preliminary figures from the automotive industry indicate that the number of new motor vehicles sold in November recovered slightly from the 12.4% decline reported in October. The number of housing starts in November (-5.5%) lost about half of the cumulative gain of the previous two months.

Available on CANSIM: matrices 2399, 2400 (main matrices), 2299, 2397, 2398, 2401-2416 and 2418-2420.

The October 2000 issue of Retail trade (63-005-XIB, $16/$155; 63-005-XPB, $21/$206) will be available soon. See How to order products.

Retail sales estimates for November will be released on January 22, 2001.

To order data, or for general information, contact the Client Services Unit (1-877-421-3067; 613-951-3549; retailinfo@statcan.gc.ca). For analytical information, or to enquire about the concepts, methods or data quality of this release, contact Paul Gratton (613-951-3541; gratpau@statcan.gc.ca), Distributive Trades Division.

Retail sales

Retail sales