Retail Trade

Retail sales advanced 1.2% in March to a record high of $27.4 billion, after increasing 2.6% in February and 1.7% in January. Consumer spending increased by at least 1.0% in six of the seven retail sectors, contributing to a sizable 3.0% gain in total retail sales in the first quarter compared with the last quarter of 2003.

Retailers enjoyed a resurgence in growth since the start of 2004, after experiencing poor sales gains in 2003. Previously, retail sales had generally been increasing at a rapid pace in 2002 and in the fall of 2001.

Retail sales reached new heights in the first quarter of 2004, thanks in part to revived activity at auto dealerships, but also to record sales enjoyed by other retailers. Excluding sales by motor and recreational vehicle dealers, retail sales rose 1.0% in March and jumped 3.3% in the first quarter. For total retail sales excluding auto dealers, this was the largest quarterly gain in almost 17 years. Sales by non-auto retailers soared 3.6% in the second quarter of 1987.

In constant dollars, retail sales rose 1.1% in March and 2.7% in the first quarter of 2004, an indication that sales growth was real and not inflated by higher prices.

All sectors, except general merchandise, post higher sales in March

Drug stores (+2.3%) led all other retail sectors in sales growth in March, after experiencing a 0.8% decline in February. Consumers spent 4.1% more in drug stores in the first quarter of 2004 compared with the last quarter of 2003. This represented the most significant quarterly jump in 11 years.

Retailers in the furniture sector posted a 1.7% sales gain, following a 2.2% increase in February. On a year-over-year basis, furniture stores continued to lead other retailers in the first quarter, with sales up 10.3% compared with the same quarter of 2003. Sales in furniture stores have been advancing by at least 8.0% annually since 1997, with the exception of 2003, when annual sales grew by 6.3%.

Sales in the clothing sector advanced for a third consecutive month in March (+1.6%). After two years of modest gains, consumer spending in clothing stores increased rapidly in the first three months of 2004, resulting in a 3.8% gain in the first quarter compared with the last quarter of 2003.

The automotive sector posted a 1.5% sales increase in March, adding to the sizable 5.3% gain in February. Within this sector, stores selling automotive parts, accessories and services (+1.9%) and motor and recreational vehicle dealers (+1.8%) enjoyed similar sales increases, while sales rose marginally in gasoline service stations (+0.2%).

Despite a rise of 1.9% in the first quarter of 2004 compared with the last quarter of 2003, sales by motor and recreational vehicle dealers remained 2.8% below those in the same quarter a year ago. These dealers had reported five consecutive monthly declines at the end of 2003, pulling sales down 11.8% over that period.

Food retailers enjoyed their third straight monthly sales increase in March (+1.0%), pushing sales up 2.1% in the first quarter. This was the largest quarterly sales increase in seven years for food retailers. Prior to 2004, food stores had experienced essentially flat sales since April 2003.

Lower sales in department stores in March (-2.6%) led to a 0.8% decline for the overall general merchandise sector. Department store cash registers cooled down after two months of strong sales increases, which were partly attributed to store openings in late January. Sales in department stores jumped 5.7% in the first quarter of 2004, after remaining flat in the last quarter of 2003.

Retail sales up in eight provinces

Retail sales advanced in all provinces in March, except Newfoundland and Labrador (-3.2%) and Manitoba (-0.7%). Retailers in these two provinces had posted strong sales gains in February, leaving March's sales near record levels.

In March, consumer spending in retail stores advanced by at least 1.5% in five provinces: Prince Edward Island (+3.6%), Nova Scotia (+2.7%), Quebec (+2.5%), British Columbia (+2.1%) and New Brunswick (+1.5%). Sales increases were much less significant in Ontario (+0.7%), Saskatchewan (+0.4%) and Alberta (+0.3%), after the rapid advances in February.

On a quarterly basis, retailers in Nova Scotia (+0.7%), Ontario (+2.1%), New Brunswick (+2.2%) and Saskatchewan (+2.5%) posted sales increases below the 3.0% national average in the first quarter compared with the last quarter of 2003.

In February and March 2004, retail sales in Ontario barely surpassed the previous peak reached in February 2003. Strong non-auto sales were behind these recent increases in Ontario, as new motor vehicle sales in the first quarter were only 0.3% above those in the last quarter of 2003, when sales dropped 10.0%.

Related indicators for April

A rise in full-time jobs led to a 0.3% increase in total employment in April, more than making up for losses in the previous two months. Housing starts fell slightly in April (-4.5%) after reaching, in March, their second highest level since August 1987. It is estimated that the number of new motor vehicles sold increased 2.5% from March, based on preliminary data obtained from the auto industry. This was the fourth consecutive monthly gain in new motor vehicle sales.

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 March 2004 issue of Retail Trade (63-005-XIB, $18/$166) will soon be available.

Data on retail trade for April 2004 will be released on June 25.

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.