Retail trade

View the most recent version.

Retail sales rose by 0.6% in December to an estimated $35.1 billion on the strength of sales by new car dealers. This was the third increase in retail sales in four months and helped make 2007 the year with the second highest retail growth rate since 2002.

In 2007, retailers sold an estimated $412.2 billion worth of goods and services, up 5.8% over 2006.

Sales in the automotive sector (+3.2%) accounted for most of the December increase in sales. Excluding two of this sector's components, new car dealers and used and recreational motor vehicles and parts dealers, retail sales fell 0.4% in December, the first decrease in five months.

Holiday sales started hot off the mark in November, but lost steam rather quickly, leaving traditional Christmas retailers with rather disappointing sales in December, including clothing and accessory stores (-2.7%), miscellaneous retailers (-1.2%), furniture, home furnishings and electronics stores (-1.1%) and food and beverage stores (-0.8%). Building and outdoor home supplies stores also posted a dip (-1.2%).

After November posted the biggest jump in monthly sales since early 2007, general merchandise stores (+0.5%) faced only moderate growth in December. Sales at pharmacies and personal care stores (+0.1%) continued to stagnate as in the previous two months.

When price changes are taken into account, retail sales in constant dollars rose 0.5% in December.

In the fourth quarter of 2007, retailers posted a 1.2% increase in sales, mainly due to a 2.9% hike in sales in the automotive sector. This more than offset the 0.3% decline in the third quarter of 2007, which followed increases above 2.0% in the first two quarters of 2007.

Trucks drive new car sales

The increase in December sales by new car dealers (+4.4%) was primarily attributable to truck sales (+7.7%), according to the New Motor Vehicle Sales Survey. In this survey, trucks include mini-vans, sport utility vehicles, light and heavy trucks, vans and buses. This recovery in new car dealer sales completely wiped out November's slump, the fourth decline in the previous six months. Additional rebates as a result of new Canadian prices, incentives to draw customers into the showrooms before the one percentage point drop in the goods and services tax effective January 1, 2008, and better financing appear to have paid off.

Used and recreational motor vehicle and parts dealers' sales rose for the second month in a row (+3.0%) after declining for five months. This group includes snowmobile retailers and tire shops.

The increase in gasoline station sales (+1.5%) was mainly attributable to the 1.7% rise in the price of gasoline, according to the Consumer Price Index (CPI). Sales in gasoline stations have generally been on the rise since the decline observed in September 2006.

Clothing store sales drop

Sales in clothing stores (-3.2%) fell sharply, accounting for most of the decrease in the clothing and accessories sector in December. Sales in this sector do not appear to have benefitted from declines in the price of clothing over the previous months.

Building and outdoor home supplies stores sales (-1.2%) fell for the third consecutive month in December. Specialized building materials and garden stores (-4.1%) were the main factors, posting their second steepest monthly drop in sales in 2007. Home centres and hardware stores (-0.5%) posted their third consecutive decrease in sales. After a virtually uninterrupted rise over the past few years, home centre and hardware store sales have been decreasing since the middle of 2007.

In the furniture, home furnishings and electronics sector, sales fell by 1.1% in December, after a slight recovery in November. This decline was mainly due to lower sales in furniture stores (-3.6%). The 2.6% rise in sales in home furnishings stores almost cancelled out the decrease in sales in computer and software stores (-4.8%) and home electronics and appliance stores (-0.3%).

Sales by food and beverage stores (-0.8%) also lost ground in December. Sales in beer, wine and liquor stores fell 2.1% after a strong showing in November. Supermarkets (-0.5%) saw their sales fall slightly after four consecutive months of increases.

Saskatchewan retailers remain on the upswing in December

Six provinces posted retail sales growth in December. The strongest increases were observed in Saskatchewan (+2.1%) and in Newfoundland and Labrador (+2.1%). For Saskatchewan, this was the third monthly increase of over 2.0% in four months. For Newfoundland and Labrador, this is the second biggest increase in the past four months.

Sales in Manitoba continued to climb (+1.1%), with the fourth consecutive monthly increase of 1.0% or more. British Columbia overcame the stagnation observed over the past six months, showing a 1.1% rise in sales as well.

Sales in Ontario (+1.1%) were up for the third time in four months. Sales in Quebec lost some ground, falling 0.3% in December after rising in the previous two months.

Annual 2007: Home furnishings stores show top growth

Of the 18 trade groups, 3 posted double-digit growth rates in 2007. Sales by home furnishings stores (including floor covering and window treatment stores) rose 12.2% to $6.0 billion in 2007. Sales by these stores represented 1.5% of total retail sales in Canada.

Sales by gasoline stations, which are closely tied to changes in the price of gasoline, reached $46.1 billion in 2007, an increase of 10.8%. This was higher than the 8.5% posted in 2006 but still below the large hikes observed in 2004 (+15.0%) and 2005 (+11.4%), when the price of gasoline skyrocketed. The CPI for gasoline rose by 4.5% in 2007, the weakest increase since 2002.

Sales by home electronics and appliance stores rose 10.5% to $12.3 billion in 2007. Sales by this trade group have been on the upswing for several years.

Sales at pharmacies and personal care stores (+8.8%) were in third place in terms of their contribution to the increase in retail sales in 2007, following new car dealers and gasoline stations. Sales had surged in 2006, reaching a record high of 10.3%. Prior to 2006, annual growth rates had been averaging just over 5% since 2000.

Lower-than-average growth for the three largest retail trade groups

As in previous years, new car dealers were the main contributors to total retail trade activity in 2007, representing an 18.7% share of sales. Sales by new car dealers reached $77.2 billion, an increase of 3.4%. Sales growth at these dealers has slowed over the past two years, from 5.0% in 2005 to 4.4% in 2006.

Supermarkets, the second largest retail sales trade group, continued to grow at a moderate rate, with $65.3 billion in sales in 2007, an increase of 2.8%. Two of the most influential factors affecting sales in these stores are shifts in population and changes in price. Canada's population increased by 1.0% in 2007, according to Quarterly Demographic Estimates, Vol. 21, no. 3 (91-002-XWE, free). In that same year, the CPI indicated a 2.7% rise in the price of food sold in stores.

General merchandise stores saw their sales rise 4.5% to $48.6 billion in 2007. This third largest retail sales trade group includes department stores, warehouse clubs, superstores and home and auto supplies stores. This is the third consecutive year that sales growth for these types of stores fell short of the overall growth rate for retail trade.

Sales growth in Canada's three largest cities below national average

Canada's three largest cities saw their 2007 sales rise less than the national average. Among the Toronto, Montréal and Vancouver census metropolitan areas, retail sales in Toronto (+5.4%) recorded the strongest annual growth, followed closely by Vancouver (+5.3%). Montréal showed a 3.2% increase in sales.

Among provinces, Saskatchewan dominated retail sales in 2007. The province's retailers saw their sales surge by 12.9%, which was almost twice as high as the previous year's growth and the highest rate for the province since the start of the series in 1991.

In contrast to 2006, when retail sales in Alberta grew far more than in the other provinces, this province ranked fourth in 2007 with a 9.0% increase, right behind the record growth rates of 9.4% in both Manitoba and Newfoundland and Labrador.

Related indicators for January

Employment rose by an estimated 46,000 in January, which boosted the employment rate to an unprecedented high (63.8%), according to the Labour Force Survey. This upward movement brought the unemployment rate back to 5.8%, the same 33-year low it had reached in October 2007.

Preliminary data on automotive industry sales indicate that the number of new cars sold in January increased significantly, mainly as a result of passenger car sales.

According to the Canada Mortgage and Housing Corporation, the seasonally adjusted annual rate of housing starts in Canada rose a strong 20.6%, from 184,700 in December 2007 to 222,700 in January 2008.

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

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

The December 2007 issue of Retail Trade (63-005-XWE, free) will be available shortly.

Data on retail trade for January will be released on March 25.

For more information or to order data, contact Client Services (toll-free 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 Claude Bilodeau (613-951-1816), Distributive Trades Division.

Table(s).