Retail trade

Retail sales bounced back after two months of sluggish sales, advancing 0.6% in October to $31.0 billion, mainly on the strength of the auto sector.

Excluding sales by dealers of new, used and recreational vehicles and auto parts, retail sales fell 0.3% in October. Still, consumer spending at non-auto retailers remained robust, as October represented only the second decline since the start of the year.

Besides the 2.1% sales gain in the auto sector, two other sectors showed strong gains in October: pharmacies and personal care stores (+0.9%) and furniture, home furnishings and electronics stores (+0.5%).

Meanwhile, sales in the food and beverage (+0.1%) and general merchandise (-0.1%) sectors remained essentially unchanged from the previous month. Consumers spent less at miscellaneous retailers (-0.7%) building and outdoor home supplies stores (-0.8%) and clothing and accessories stores (-1.3%) which all posted sizable declines from September. Miscellaneous retailers include stores such as sporting goods, hobby, music and book stores.

Total retail sales advanced to its third highest level since the start of the survey, with the highest level set this July at just over $31.2 billion in monthly sales.

Auto sales help retail sales to bounce back

Sales at new car dealers increased by 5.5% in October after retreating in August and September. In July, sales had surged at new car dealerships in light of employee pricing programs offered by some auto makers to the general public. Overall, October saw new car dealers gain back about half the ground they lost in the previous month.

Consumers were given a break at the pump with lower gasoline prices in October, resulting in a decrease of 1.8% in the value of sales at gasoline stations. Over the long run, gasoline station sales have been on the rise since April 2003. Prices have played a major role in this run-up.

Pharmacies and personal care stores (+0.9%) enjoyed the largest sales increase of all non-auto retail sectors in October. In the previous two months, sales in this sector picked up speed, posting gains of 1.2% in August and then another 2.4% in September. October continued nine months of uninterrupted sales gains since the start of the year. Generally, sales in these stores have been on the rise since the autumn of 2002.

Stores in the furniture, home furnishings and electronics sector saw sales increase 0.5% in October, despite a 0.9% sales drop in home electronics and appliance stores. Strength in this sector came from higher sales in furniture stores and home furnishings stores. Retailers in the furniture, home furnishings and electronics sector have seen their sales gain momentum since the summer of 2004, despite little progress in the first half of 2005.

Food and beverage store sales edged up 0.1% in October compared with one month earlier. A strong 3.0% gain in beer, wine and liquor stores offset a sizable 0.7% sales decline at supermarkets — the largest drop since last December when sales at supermarkets fell 1.5%.

Sales at general merchandise retailers were little changed in October, reflecting weak results in both department stores and other general merchandise stores. In spite of this, October's sales level was just slightly below September's all time high of $3.7 billion, following five months of little growth.

First decline in three months for home centres

In the building and outdoor home supplies sector, home centres and hardware stores saw sales slip by 0.3%. Despite this dip, October followed two strong months of gains above 1.0% and represented a 9.1% increase over the same month last year.

Miscellaneous retailers such as sporting goods, hobby, music and book stores took a hit in October, with sales falling 2.4% compared with September.

The overall value of sales for clothing and accessories stores was deflated by lower prices resulting from discounts of women's clothing in October. Clothing store sales dropped 1.5% from September. After a surge at the start of 2005, sales growth in clothing stores has either been flat or declining.

Four provinces surpass national growth rate

Retailers in Newfoundland and Labrador saw sales surge by 4.6% in October over the previous month, recouping the losses over the two previous months, when sales fell by 0.9% in August and 2.9% in September. Manitoba (+2.0%) and Prince Edward Island (+1.1%) also posted gains well above the national average of 0.6%. Retailers in Quebec (+0.4%) and Ontario (+1.0%) both posted increases after two months of sales declines.

Related indicators for November

Total employment increased by 0.2% in November (+31,000), on the strength of gains in full-time jobs, attributable, in large part, to more jobs in construction. In addition, the overall unemployment rate (6.4%) fell to its lowest level in three decades. Housing starts were up 7.0% in November to a seasonally adjusted annual rate of 222,100 units, according to the Canada Mortgage and Housing Corporation. Estimated from early results supplied by the auto industry, the number of new motor vehicles sold in November rose by about 3% from October.

Available on CANSIM: tables 080-0014 to 080-0017 and 076-0005.

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

The October issue of Retail Trade (63-005-XIE, $18/$166) will soon be available.

Data on retail trade for November will be released on January 23.

For more 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 Jane Lin (613-951-9691), Distributive Trades Division.