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The Daily. Friday, July 21, 2000

Retail trade

Retail sales advanced 0.4% in May to $22.7 billion, driven by the automotive sector. Most other sectors also posted advances; only food stores (-1.3%) and furniture stores (-0.4%) suffered declining sales. When prices are held constant, retail sales remained unchanged in May from the previous month.

May's increase continued a pattern of volatile sales that have been observed since the fall of 1999. April's 1.1% decline in retail sales followed a 2.1% advance in March and a 0.8% decline in February. Several factors have contributed to the recent volatility in retail sales. A warmer-than-usual winter and cooler-than-normal spring have shifted consumers' spending patterns. Additional volatility has been caused by large swings in gasoline prices.

Retail sales had generally been rising sharply from the start of 1999, with slower advances in 2000. Retail sales in May were 6.2% higher than in May 1999.

Auto sector drives up sales

Sales in the automotive sector rose 1.5% in May, partially offsetting April's 3.4% decline. Within this sector, sales increased in automotive parts accessories and service stores (+5.7%), motor and recreational vehicle dealers (+0.9%) and gasoline service stations (+0.4%). After advancing strongly through most of 1999, sales in the automotive sector have been posting smaller gains so far in 2000.

Consumers returned to automotive parts, accessories and services stores; sales in those outlets in May bounced back from a 6.2% decline in April. Despite the volatility seen in recent months by these stores, sales have generally been rising since the fall of 1997.

Sales by motor and recreational vehicle dealers advanced in May (+0.9%) following a 3.0% decline in April. May's advance came despite a 1.5% reduction in the value of new motor vehicles sold. Sales by motor and recreational vehicle dealers includes the sales of new cars, used cars, boats and recreational vehicles as well as the sales of parts and services by these stores. Marine and recreational vehicle dealers, in particular, had buoyant sales. Despite May's advance, sales by motor and recreational vehicle dealers have been weak through most of 2000 thus far, after strong advances throughout 1999.

Sales in gasoline service stations rose 0.4% in May, coincident with a 1.9% increase in prices at the pump. The price of gasoline started to rise sharply in February 1999. Over this period, the price of gasoline has jumped 37.4%, while sales in gasoline service stations have risen 34.7%. Prior to 1999, sales in gasoline service stations had been declining for two years.

Food stores are starved of sales

Consumers spent 1.3% less in food stores than they did in April. About one-quarter of food store sales come from non-food items, many of which are seasonal in nature. Sales of these items may have been partially affected by the cooler-than-normal weather seen in much of Canada in May. Sales in food stores have been rising gradually since the spring of 1996.

Clothing stores posted a 0.6% advance in May; men's clothing, women's clothing and shoe stores regained some of the ground that they had lost in April. Unseasonable weather has caused some volatility in clothing stores' sales in recent months. Sales in clothing stores have generally been rising since the start of 1996.

A small advance was also seen in general merchandise stores (+0.3%). Within this sector, the 0.2% decline in department store sales was more than offset by advances by other general merchandise stores (+1.0%). Sales in general merchandise stores have been flat since the summer of 1999; falling department store sales have been offset by gains in other general merchandise stores.

Drug store sales were virtually unchanged (+0.1%). Sales in drug stores have been rising slowly since the summer of 1997, except for a pause in the second half of 1998. Furniture store sales were off 0.4% in May, but have been advancing since the spring of 1996.

Ontario posts strongest advance

Retailers in Ontario (+1.7%) and Saskatchewan (+1.1%) enjoyed the strongest advances in May. Retailers in the Northwest Territories (-3.5%), Prince Edward Island (-1.5%), Yukon (-1.3%) and British Columbia (-1.2%) suffered the largest declines.

Ontario's increase came largely on the strength of the automotive sector, although most other sectors posted advances. Consumers have been spending more in Ontario retail stores since the summer of 1996.

The gains in Saskatchewan were also broad-based; only the food sector posted significant declines. Retail sales in Saskatchewan have been rising slowly since the start of 1999 after declining through most of 1998.

With May's decline, retail sales in British Columbia fell 1.7% short of the peak reached in December 1999. Retail sales had been rising from the fall of 1998 to the end of 1999, following a one-year slump.

Related indicators for June

In June, employment was virtually unchanged (-0.1%). The number of housing starts fell for a fourth consecutive month (-1.8%). The price of gasoline rose 6.3% compared with May. Preliminary figures from the auto industry indicate an increase in the number of new motor vehicles sold in June.

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

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

Retail sales estimates for June will be released on August 21.

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 Greg Peterson (613-951-3592; petegre@statcan.gc.ca), Distributive Trades Division.

Retail sales

Retail sales