For the seventh consecutive month, Canadian retail sales posted the fastest increase since September, rising by 1.3% to 55.2 billion in November. However, according to Statistics Canada’s preliminary estimates for December, the momentum will likely be dampened, despite the holiday shopping season.
The increase in retail sales for November was largely led by higher e-commerce sales and sales at food and beverage stores. Sales increased in 7 of the 11 subsectors, accounting for 53.4% of all retail trade. In terms of volume, retail sales grew by 1.2% in November. Core retail sales, which do not take sales at gasoline stations and motor vehicle and parts dealers into account, rose by 2.6%.
For the first time since April, sales at motor vehicle and parts dealers fell by 0.9%, with new motor vehicle sales declining by 6.7% year-over-year in November. Truck sales, which also take into account the sale of light trucks as well as heavy trucks and buses, dropped by 4% year-over-year, meanwhile passenger vehicle sales decreased by 20.5%. Compared to February 2020 pre-pandemic levels however, new motor vehicle sales registered an increase of 7.6%.
Core retail sales rose by 2.6% in November, mostly due to an increase of 5.9% in sales at food and beverage stores. General merchandise stores reported higher sales by 1.6%, after a decline of 0.5% in October. Sales at building material and garden equipment and supplies dealers rose for the fourth consecutive month by 2.2%, meanwhile clothing and clothing accessories stores saw sales levels fall by 3% for the second straight month.
Statistics Canada also found that retail e-commerce sales reached an unadjusted $4.3 billion in November, amounting to 7.4% of total retail trade— the largest share since May. Compared to the same period a year prior, e-commerce sales were up 75.9% in November, as many shoppers refrained from going to brick-and-mortar stores and instead stayed home. In addition, a number of retailers urged shoppers to buy early in order to avoid shipping delays prior to the holiday season, as well as take advantage of Black Friday price discounts.
Statistics Canada also issued an advanced estimate of retail sales for December, which suggests that retail sales dropped by 2.6%. The decline in retail sales amid the busy holiday season coincides with the increased number of Canadians that conducted their holiday shopping early. In addition, the month of December saw additional public health restrictions being imposed across numerous regions in Canada, thus further dampening retail sales.
Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.