The Daily. Thursday, March 21, 2002

Retail trade

Retail sales advanced 1.1% in January from December to $25.3 billion, the fourth consecutive monthly increase. In January, sales went up more than 1.0% in general merchandise stores, drug stores, stores in the automotive sector and those classified in other retail (particularly liquor stores).

Retailers saw sales advances of 1.4% in both December and November, following a 2.2% jump in October. Retail sales have jumped 6.3% since September, when they were hurt by the events of September 11.

Retail sales from November to January were significantly higher than the essentially flat sales reported since April 2001. Prior to that month, sales had generally been advancing since the summer of 1998, slowed by a pause in the second half of 2000.

In constant dollars, retail sales rose the same 1.1% in January. Higher prices for gasoline at the pump and fresh vegetables cancelled the effects of lower prices for clothing and footwear.

Post-September 11 retail sales

Canadian and US retail sales evolved quite differently after September 11. Both countries reported similar declines in September (-1.7% in Canada and -1.8% in the United States). Subsequently, Americans increased their spending in retail stores 7.6% in October, responding to a patriotic call to resume their normal lives and to continue shopping. Several auto manufacturers in the United States launched aggressive incentives in October, resulting in a 23.9% jump in auto sales. However, US retail sales have been lacklustre since that time, falling 3.8% in November and then continuing to be essentially flat. US retail sales rose only 2.7% from September to January, while Canadian retail sales climbed 6.3% during the same period.

Note to readers Estimates from the Monthly Retail Trade Survey are classified according to the 1980 Standard Industrial Classification. In the Canada-US section, sales by building material dealers and non-store retailers were excluded from the US total retail sales in order to make a more direct comparison between these countries. Retail sales estimates for February will be released on April 23.

Good start in 2002 for general merchandisers

After remaining essentially flat for most of 2001, sales in the general merchandise sector advanced strongly in December (+1.7%) and January (+2.2%). Higher department store sales in both months were behind the gains seen in the sector. Department store sales, supported in part by recent store openings, rose 2.6% in December and 4.1% in January. These gains added considerable strength to the advancing sales reported by these stores since the spring of 2000. Sales by other general merchandise stores (-0.4% in January) have been moving downward since the fall of 2000.

Drug stores posted healthy sales results in January (+2.1%), after a strong annual increase in 2001 (+7.2%). With a fourth consecutive monthly gain, drug stores continued the strong sales observed since the spring of 2000.

The automotive sector posted its fourth consecutive monthly sales advance with a 1.8% increase in January. Within this sector, higher gasoline prices led to a 4.9% sales gain by gasoline service stations. Despite January's increase, sales in gasoline service stations have been generally falling since the start of 2001, after a period of strong advances that began in early 1999. Automotive parts, accessories and services stores posted a 1.7% sales increase in January, ending two months of decline.

Motor and recreational vehicle dealers posted a 1.1% sales increase in January, their fourth consecutive monthly sales gain. After the 3.1% decline in September, sales by these dealers jumped 14.8% over the following four months. The motor and recreational vehicle dealers category includes not only new car dealers, but also dealers of used cars, motor homes and snowmobiles. New car dealers rely on sales of new cars for approximately 60% of their revenues; the rest comes from sales of used cars, parts and labour.

Consumers reduced spending in clothing stores in January (-0.6%) after increasing it in the previous three months. January's decline came mostly from lower prices of clothing and footwear during the month (-1.4%), as many items were still on sale from the holiday season. Increases reported in the last three months of 2001 reversed the downward sales movement seen from April to September.

All but two provinces post higher retail sales

All provinces posted strong sales gains in January, except Quebec (-1.2%) and British Columbia (0.0%). Retail sales advances ranged from 1.4% in Saskatchewan to 5.0% in Newfoundland and Labrador. In the four-month period following September 2001, retailers in all provinces other than Quebec and British Columbia posted sales advances above 5.0%.

January's weaker sales results in Quebec and British Columbia ended three consecutive months of robust gains.

In Quebec, retail sales were down in all sectors in January, except for a small increase in the automotive sector. The robust sales gains seen at the end of 2001 reversed the previous five-month period of declining sales. Prior to the spring of 2001, retail sales in Quebec have generally been increasing since the summer of 1998.

Lower January sales by British Columbia retailers in the clothing, furniture and automotive sectors were offset by increases in the other retail sectors. Retailers in British Columbia saw continually rising sales since the end of 1998.

Related indicators for February

Total employment remained flat in February after the 0.5% surge in January. The number of new motor vehicles sold in February was also unchanged from January, according to preliminary results from the auto industry. After an exceptional 17.8% jump in January, housing starts fell 12.3% in February. Nevertheless, these economic indicators remained at historically high levels.

Available on CANSIM: tables 080-0001 to 080-0005.

The January 2002 issue of Retail trade (63-005-XIB, $16/$155) will be available soon.

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

Retail sales

Retail sales