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The Daily

Friday, April 20, 2007
February 2007

Retail sales were essentially flat in February, masking underlying differences in movements among retail trade groups. Weak sales at new car dealers were offset by strong sales growth in other major retail sectors in February.

Total retail sales edged up 0.1% in February to an estimated $33.3 billion. Excluding new, used and recreational vehicles and parts dealers, retail sales rose 1.0%, mainly due to gains at gasoline stations and supermarkets. Prior to 2007, sales had been rising steadily with higher annual growth rates each year since 2003.

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Five of the eight retail sectors experienced varying degrees of sales declines in February. Leading the way was the automotive sector (-0.4%). Clothing and accessories stores followed with a 1.5% drop in sales from January. Miscellaneous retailers (-0.5%), building and outdoor home supplies stores (-0.5%) and furniture, home furnishings and electronics stores (-0.4%) also fell moderately.

Offsetting these declines were sales increases in the food and beverage stores (+1.3%), pharmacies and personal care stores (+0.9%) and general merchandise stores (+0.6%) sectors.

Rising prices at the pump as well as for fresh vegetables had an impact on sales in February. Once price changes were taken into account, total retail sales actually fell by 0.7%.

Decline in autos countered by price-induced gasoline and supermarket growth

Sales at new car dealers fell by 4.0% in February. According to the New Motor Vehicles Sales survey, the weakness in truck sales (which includes minivans, sport-utility vehicles, light and heavy trucks, vans and buses) dominated the February decrease.

Partially offsetting this decline in the automotive sector were sales gains at gasoline stations (+4.8%). Due to a gasoline shortage following a fire at an Ontario refinery, prices at the pump rose by 9.8% in Ontario and by 3.8% nationwide in February, according to the Consumer Price Index.

Used and recreational motor vehicles and parts dealers registered a 2.8% increase in February, after nine months of moderate fluctuations. Prior to this period, sales surged at the end of 2005 from increased demand for recreational vehicles.

Sales at supermarkets rose by 2.0%, the strongest increase in 12 months, which was partially induced by a 12.0% hike in fresh vegetable prices between January and February. Fresh vegetable harvests were affected by cooler temperatures on the West Coast of the United States in February. Fresh fruits and vegetables account for over 10% of food and beverage stores sales, according to the latest release of the Quarterly Retail Commodity Survey.

Pharmacies and personal care stores continued to see their sales climb in February (+0.9%). Sales have been rising steadily for this type of store, with only one monthly decline recorded in 2006. Sales at general merchandise stores (which includes department stores, warehouse clubs, superstores and home and auto supplies stores) advanced 0.6% in February for a third consecutive monthly increase.

Sales at clothing stores (-1.6%) and at shoe, clothing accessories and jewellery stores (-0.9%) declined in February after several months of large sales fluctuations, recently due to deviations from normal weather patterns. Home centres and hardware stores sales fell by 0.4%, after three straight months of solid increases. This slight sales decline may have reflected a February drop in housing starts after unusually strong construction activity in January, resulting from the unseasonably warm weather in the first half of January.

Mixed bag for provinces and territories in February

February was a mixed bag in terms of growth rates among provinces. Ontario sales advanced by 0.6%, while Quebec sales edged down 0.2%. The Atlantic provinces, as a whole, saw sales rise moderately (+0.3%) in February while most of the Western provinces experienced sales declines.

Strong sales at gasoline stations helped advance retail sales in Ontario in February, while weakness at new car dealers played a part in bringing down Quebec's sales growth.

Weak sales at new car dealers also resulted in sales declines in Saskatchewan (-1.8%), Manitoba (-0.6%) and Alberta (-0.4%). Sales in British Columbia gained 0.4% following solid back-to-back increases in December and January.

Related indicators for March

Employment jumped by an estimated 55,000 in March, continuing the upward trend that began in September 2006. Despite this growth in employment, the unemployment rate remained unchanged at 6.1%, as more people entered the labour market.

Preliminary sales data from the automotive industry indicate that the number of new motor vehicles sold in March remained relatively unchanged from February.

The seasonally adjusted annual rate of housing starts was 210,900 units in March, up from 196,000 units in February, according to Canada Mortgage and Housing Corporation.

Available on CANSIM: tables 080-0014 to 080-0017.

Definitions, data sources and methods: survey numbers, including related surveys, 2406 and 2408.

The February 2006 issue of Retail Trade (63-005-XWE, free) will soon be available.

Data on retail trade for March will be released on May 18.

For more information or to order data, contact Client Services (toll-free 1-877-421-3067; 613-951-3549; For analytical information, or to enquire about the concepts, methods or data quality of this release, contact Lucy Chung (613-951-1903), Distributive Trades Division.

Tables. Table(s).