Analysis: Canada Retail Sales +0.4% But Volumes -0.2%

By Yali N'Diaye

     OTTAWA (MNI) - Canadian retail sales rose 0.4% in July after remaining

unchanged in June, lifting the 12-month growth pace to 7.8% from 7.2%,

Statistics Canada reported Friday.

     Analysts in a MNI survey had expected sales to edge up just 0.1% on the

month.

     However, the underlying performance was not as strong as the headline

figure suggested, as volumes, more relevant to real GDP, contracted 0.2%,

marking the first and largest decline since December 2016, when they fell 0.6%.

     Volumes were especially weak for gasoline stations and electronics and

appliances, dragging down nominal sales in these two subsectors, which posted

declines of 0.3% and 1.3%, respectively.

     In addition, core nominal sales, excluding autos and parts, were up 0.2%,

less than the 0.4% growth expected by analysts.

     Sales were boosted by motor vehicles and parts, with a 0.8% gain driven by

higher new car sales (+1.4%).

     Sales excluding both gasoline stations and autos and parts rose 0.3% after

a 0.9% increase the previous month.

     Excluding gasoline stations alone, sales rose 0.5% after advancing 0.3% in

June.

     Overall, six of 11 subsectors posted nominal gains in July, representing

75% of retail trade.

     Along with autos, food and beverages were key contributors, with sales up

0.9%, marking the fourth consecutive increase.

     Elsewhere, health and personal store sales rose 0.7%, clothing and

accessories were up 0.3%, general merchandise up 0.1%, and miscellaneous sales

up 0.9%.

     Gains were also widespread across regions, with eight provinces posting

higher sales.

     Statistics Canada also reported that as a percentage of total sales, the

share of E-commerce remained roughly stable at 2.3% in July. However, it was up

from 1.7% a year ago.

--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com

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