Analysis: Canada Retail Sales Disappoint in Aug, Led By Food>

By Yali N'Diaye

     OTTAWA (MNI) - Canadian retail sales contracted 0.3% in August on 

widespread declines led by food, more than offsetting gains in autos and 

gas station sales and driving down the 12-month growth rate to 6.9% from 

7.7% in July, Statistics Canada reported Friday. 

     If not for a 0.7% increase in motor vehicles and parts, the 

performance would have been even worse, with sales down 0.7%, and the 

12-month rate down one full point to 5.1% 

     Analysts in a MNI survey had expected sales to rise 0.5% on the 

month, with a gain of 0.3% excluding autos. 

     The disappointing performance was due to lower volumes, which fell 

0.7%, the largest decrease since March 2016. 

     Also reflecting the weakness in August was the widespread nature of 

decreases, with 8 of 11 subsectors recording lower sales, although their 

weight totaled 57%. 

     Gas station receipts were up 3.1% on the month, the other major 

positive contributor along with autos. Excluding gas stations, sales 

were down 0.7% in August, bringing down the 12-month rate to 9.4% from 

10.0%. 

     Excluding autos and gas, core sales dropped 1.3%, their largest 

decline since December 2016. 

     Clothing and accessories was the only other subsector to post an 

increase, although it was just half a percent. 

     Food and beverages were the largest negative contributor with sales 

down 2.5%, the largest decrease since January 2015, more than offsetting 

the 1.1% increase in August. 

     In particular, volumes decreased at supermarkets and other grocery 

stores. During the month, overall unadjusted prices for food contracted 

0.3%, including a 0.6% decrease for store food. The price declines 

intensified in September, with food prices down 0.8%, including a 1.3% 

drop for store food. It is unclear to which extent the Canadian dollar 

appreciation has played a role. 

     Regionally, sales decreased in six provinces, led by Quebec and 

British Columbia. 

     Statistics Canada also reported that as a percentage of total 

sales, the share of E-commerce remained roughly stable at 2.31% in 

August versus 2.33% in July. It was up from 1.77% a year ago. 

     --MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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