Retail trade

View the most recent version.

Plummeting gas prices and slumping auto sales drove total retail sales down 1.2% in September. This decline limited retail sales for the third quarter to about half the rate of the previous two quarters. Sales were up 1.3% in the third quarter following back-to-back quarterly increases of 2.4%.

Retail sales fell from $33.3 billion to an estimated $32.9 billion in September, the largest monthly decline thus far in 2006. Most of the decline in September was due to lower sales at gasoline stations and new car dealers. Excluding the automotive sector, retail sales actually increased by 1.0%.

Sales in the automotive sector fell by 5.2% in September. This fall was partially offset by considerable gains in the clothing and accessories stores sector (+6.3%), as well as strong yet smaller gains in the miscellaneous retailers (+2.2%), general merchandise stores (+1.2%), pharmacies and personal care stores (+0.7%) and food and beverage stores (+0.2%) sectors.

After four months of advances, sales in the furniture, home furnishings and electronics stores sector were flat in September, while sales fell for the first time in five months in the building and outdoor home supplies stores sector (-0.7%).

Once price changes were taken into account, total retail sales actually grew by 0.2% in September and third quarter growth was 0.9%.

Gasoline prices and auto sales plunge

In September, gasoline prices plummeted by 17.4% causing a record monthly decline of 12.5% in gasoline station sales. In the third quarter, sales at gasoline stations fell by 4.1% after soaring prices caused a record growth of 10.2% in the second quarter.

Sales at new car dealers were also down in September, falling 2.4% after strong gains in July and August. According to the New Motor Vehicle Sales Survey, the number of new vehicles sold was down by 4.2%, mainly due to a 9.0% decline in truck sales. Despite September's decline, new car dealers' sales were up 5.1% in the third quarter. This was the strongest quarterly increase in over four years.

Clothing stores prosper from back-to-school shopping and new fall lines

Clothing retailers reached a near-record sales gain in September as sales advanced by 6.9%. Sales were also strong among shoe, clothing accessories and jewellery stores (+4.7%). Prior to September 2006, sales in both types of stores had leveled off in recent months after a period of strong gains.

The Monthly Survey of Large Retailers indicated that sales of clothing, footwear and accessories grew by 12.7% year-over-year, the largest September increase for this category since 1999. Clothing, footwear and accessories sales among large retailers account for over 50% of total retail sales of that commodity grouping.

General merchandise stores also saw a healthy but smaller sales increase of 1.2% in September. Clothing may have played a part in the gain in this sector, which includes department stores. According to the Quarterly Retail Commodity Survey, about one-quarter of clothing, footwear and accessories sales are from general merchandise stores.

Sales in sporting goods, hobby, music and book stores also saw a spike in sales in September (+4.3%). Almost half the sales in this group came from sporting goods stores, which have a large stake in clothing. Sales were up 2.9% in the third quarter following a relatively weak second quarter (+0.4%). These types of stores have enjoyed consistent growth since mid-2004 and have only experienced two monthly sales declines since January 2006.

Pharmacies and personal care stores enjoyed their 11th consecutive monthly sales increase (+0.7%) in September. Sales in these types of stores have been fairly strong since the start of 2006. After a near-record quarterly growth of 4.7% ending June, sales gains slowed in the third quarter but were still strong at 2.7%.

Within the building and outdoor home supplies stores sector, sales at home centres and hardware stores edged down by 0.2%, only the second monthly sales decline this year. Specialized building material and garden stores, a smaller component of this sector, saw their sales fall by 3.1%.

Most provinces down due to widespread auto decline

Sales declined in 9 of the 13 provinces and territories in September, due to the widespread effect of the decline in the automotive sector. After 11 consecutive monthly sales gains, Alberta retailers experienced a setback as sales fell by 1.1% in September. Alberta sales grew by 2.7% in the third quarter, almost half the rate of the first (+6.0%) and second (+5.4%) quarters earlier this year.

The September sales declines in Ontario (-1.9%) and Quebec (-1.0%) follow a general levelling off in recent months, while the sales decline in British Columbia (-0.9%) marked only the second decline since January 2006.

Saskatchewan saw sales increase by 1.4%, led by the strength of sales by general merchandise stores. Retail sales have been generally increasing in Saskatchewan after a slowdown in the latter half of 2005. Sales also increased in Manitoba (+0.6%). Manitoba retailers have been enjoying healthy growth since 2003 and only experienced one month of sales decline this year.

Related indicators for October

Employment increased by an estimated 51,000 in October following four months of little change. The unemployment rate declined 0.2 percentage points to 6.2%.

Housing starts were up by 6.8% in October to a seasonally adjusted annual rate of 223,200 units, according to Canada Mortgage and Housing Corporation. This increase reflects a rebound in the multiple starts segment, which fell to a two-year low in September. Single starts fell to their second lowest level of the year.

Preliminary sales data from the auto industry indicate that October sales are expected to drop a further 2%, due entirely to declines in passenger car sales. This decrease, combined with the decline in September, more than offsets the gains made in July and August.

Available on CANSIM: tables 080-0014 to 080-0017.

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

The September 2006 issue of Retail Trade (63-005-XIE, free) will soon be available.

Data on retail trade for October will be released on December 21.

For more information or to order data, contact Client Services (toll-free 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 Lucy Chung (613-951-1903), Distributive Trades Division.

Table(s).