Retail trade

Consumer spending in retail stores edged up 0.2% to $25.7 billion in August, after a 0.2% decline in July. In constant dollars, retail sales remained unchanged in August, following a 0.6% decrease in July.

Retailing activity remained strong despite little growth (+1.6%) since January. Although consumers stayed away from retail stores in September 2001, when sales declined 1.6%, purchases in stores advanced rapidly in the following four months. Consequently, sales by retailers for the first eight months of 2002 were 6.1% above those reported in the same period of 2001.

Drug stores posted the largest sales increase in August (+0.6%), accompanied by smaller gains of 0.3% in each of the food, automotive and other retail sectors. Retail sales remained unchanged in the furniture and clothing sectors but declined 0.9% in the general merchandise sector.

Drug stores post largest sales gain

Sales in drug stores advanced 0.6% in August after remaining essentially flat in July (+0.1%). As in 2001, drug stores continued to be one of the leading retail sectors in 2002, surpassed only by the furniture sector. Cumulative sales for the first eight months of 2002 in drug stores were 9.0% above those in the same period of 2001. Prescription and over-the-counter drugs, as well as vitamins and herbal remedies, account for about two-thirds of all sales in drug stores. Drug store sales have been rising rapidly since the spring of 2000.

Moderate sales increases in food and automotive sectors

Retailers in the food sector posted a 0.3% sales gain in August after a 0.7% increase in July. Sales in the food sector have been advancing rapidly so far in 2002. Cumulative sales in the food sector were 4.5% higher than in the first eight months of 2001. This compares with an overall annual gain of 4.2% in 2001.

For a second consecutive month, sales increases were moderate in the automotive sector - 0.3% in August and 0.2% in July. In spite of lower sales by motor and recreational vehicle dealers in these two months, higher gasoline prices at the pump helped to sustain the level of sales in the automotive sector. Gasoline prices were up 2.5% in August and 2.8% in July, which pushed up sales by gasoline service stations 3.6% in August and 3.7% in July. The higher sales reported by gasoline service stations since the start of 2002 offset the period of general declines seen in 2001.

Sales by motor and recreational vehicle dealers were down slightly in August (-0.2%), despite a 4.1% rise in the number of new motor vehicles sold in the month. Both sales by motor and recreational vehicle dealers and the number of new motor vehicles sold have remained essentially flat since the start of 2002. However, the aggressive incentives introduced in the fall of 2001 have kept sales at record-high levels so far in 2002. For the first eight months of 2002, both the value of sales by motor and recreational vehicle dealers and the number of new motor vehicles sold during the period have been 10.0% higher than in the same period of 2001.

Furniture and clothing sectors stall

Consumer spending in the furniture sector remained unchanged in August after declining 1.0% in each of the previous two months. The exceptionally strong sales growth enjoyed by retailers in the furniture sector in the fall of 2001 has weakened since the start of 2002. This partly reflects the trend in the new housing market. From September 2001 to January 2002, sales in the furniture sector rose 9.4% and housing starts advanced 39.5% to stay essentially flat afterwards. However, both furniture store sales and housing starts remain at historically high levels. Year-to-date results remain exceptionally strong for the retail furniture sector (+12.0%) and for housing starts (+25.2%).

Retailers in the clothing sector reported no change in sales in August, continuing the period of essentially flat sales observed since the start of 2002. August's sales declines in shoe (-2.5%), women's (-1.3%) and men's stores (-0.6%) were offset by increased sales in other clothing stores (+1.5%). Stores in the "other" category, which sell a variety of women's, men's and children's clothing, represent about half of all sales in the clothing sector.

Consumers stay away from general merchandise sector

For a second consecutive month, consumers stayed away from stores in the general merchandise sector. Sales in the general merchandise sector were down 0.9% in August and 1.1% in July. August's decline came entirely from lower sales by department stores (-1.8%); weaker sales by other general merchandise stores (-3.1%) were responsible for the sector's decrease in July. Despite the recent declines, retailers in the general merchandise sector have generally enjoyed strong sales gains since September 2001 after a period of slower growth that began in the spring of 2000.

Ontario, Manitoba and Nova Scotia post the only gains

The only provincial retail sales gains in August occurred in Ontario (+0.6%), Manitoba (+0.6%) and Nova Scotia (+0.3%). All remaining provinces posted retail sales declines ranging from -0.1% to -0.5% in August.

Retailers in Ontario enjoyed their third consecutive monthly sales gain in August. With the exception of general merchandise stores, all retail sectors in Ontario contributed to the increased sales in August. Despite a short lived pause in early 2002, retail sales in Ontario have increased rapidly since September 2001 after remaining essentially flat since the fall of 2000.

Strong increases in the automotive sector helped to push sales up in Manitoba and Nova Scotia in August. Retail sales in Manitoba have been advancing rapidly since the start of 2001. In Nova Scotia, consumer spending in retail stores has remained essentially flat so far this year after a short period of strong growth in the fall of 2001 and January 2002.

Related indicators for September

Total employment increased for a ninth consecutive month in September (+0.3%), pushing the overall gain in job creation to 427,000 since the start of 2002. Preliminary figures from the automotive industry showed a slight decline in the number of new motor vehicles sold in September compared with August. Housing starts fell 6.6% in September, offsetting August's gain. Nevertheless, housing starts and sales of new motor vehicles remain at historically high levels.

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

Information on methods and data quality available in the Integrated Meta Data Base: survey number 2406.

The August 2002 issue of Retail trade (63-005-XIB, $16/$155) will be available soon. See How to order products.

For general information or to order data, contact Client Services (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; paul.gratton@statcan.gc.ca), Distributive Trades Division.