Retail trade

Consumers went on a spending spree in January, compensating for their weak Christmas shopping. Retail trade also benefited from some department store openings and the increasing popularity of gift cards, which are predominantly redeemed in January according to industry sources. Retail sales advanced 1.6% to $26.4 billion, after falling 1.3% in December.

Excluding sales by motor and recreational vehicle dealers, the largest component of the automotive sector, retail sales jumped 2.2% in January, reaching a new record high of $20.1 billion.

Despite a 0.4% sales decline by motor and recreational vehicle dealers, overall sales in the automotive sector advanced 1.1% in January, thanks to large gains at gasoline service stations and automotive parts and services stores. In fact, all other retail sectors posted sales increases of at least 1.0% in January, except for furniture stores (-1.2%), which had led other retailers in terms of sales growth in December.

Total retail sales continue to suffer from weak auto sales observed since last August. January's increase in total retail activity brought sales back to the level seen in September 2003. Prior to the summer of 2003, retail sales had generally been increasing since the fall of 2001.

Once prices are taken into account, total retail sales increased 1.2% in January, following a 1.2% drop in December.

General merchandise sector on the offensive

Another round of store openings, this time of department stores, contributed to a 5.3% sales jump in the general merchandise sector in January. Consumer spending at department stores soared 5.9% in January, after a 1.3% reduction in December. Prior to January's gain, sales in department stores had remained essentially flat since May 2003, after a period of general increases that began in the fall of 2002.

Also included in the general merchandise sector, retailers classified as "other general merchandise stores" posted a 4.5% sales gain in January, following poor sales in December (-4.7%). Previously, some high-profile store openings in November had led to a 2.4% sales increase in "other general merchandise stores." Sales by these retailers have generally been increasing since early 2003, after remaining essentially flat in the second half of 2002.

Among retailers, drug stores enjoyed the next largest monthly sales increase in January (+3.0%). After two months of relatively weak results, January's exceptionally strong gain brought drug store sales back in line with the upward trend observed since the spring of 2003.

Clothing retailers gain back losses of December

Consumers increased spending by 1.7% in the clothing sector in January, after reducing the total value of their purchases by 1.4% in December. January's sales increases were particularly strong in men's clothing stores (+3.8%) and women's clothing stores (+3.3%), followed by a 1.0% gain in other clothing stores. Retailers classified in "other clothing" stores, also known as unisex clothing stores, collect slightly more than one-half of every dollar spent in the clothing sector. Sales in the clothing sector have generally been rising slowly in the last two years.

Food retailers enjoyed a 1.2% sales gain in January, pushing sales to a new high. Prior to January, sales in food stores had remained essentially flat since the previous peak reached in April 2003.

Higher retail sales in all but one province

All provinces posted higher retail sales in January, with the exception of Saskatchewan (-0.8%). The strongest monthly increases were observed in Quebec (+2.4%) and Prince Edward Island (+2.4%), followed by New Brunswick (+2.0%), Ontario (+1.9%), Newfoundland and Labrador (+1.6%) and Alberta (+1.4%).

In Quebec, all retail sectors, except furniture, posted strong sales increases in January. Prior to January's record sales, retailers in Quebec had generally been experiencing declining sales since last August, after a period of increases that began in the fall of 2001.

January's sales gain posted by retailers in Prince Edward Island followed four consecutive monthly declines, where sales fell by 4.9% over that period. Retail sales in Prince Edward Island have been weak since early 2002.

The increased retail sales enjoyed by retailers in New Brunswick and Ontario in January followed a period of general declines that began in the summer of 2003.

Related indicators for February

Total employment remained essentially unchanged for a second consecutive month in February (-0.1%), following a period of rapid ascension in the last four months of 2003. Housing starts regained lost ground in February (+9.6%), pushing new home construction to a level slightly below the average observed in 2003. It is estimated that the number of new motor vehicles sold in February rose by about 7% from January, based on preliminary numbers obtained from the auto industry.

Available on CANSIM: tables 080-0001 to 080-0005 and 076-0005.

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

The January 2004 issue of Retail Trade (63-005-XIB, $18/$166) will be available soon. See How to order our products.

Data on retail trade for February 2004 will be released on April 27.

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), Distributive Trades Division.