MNI:Canada December Retail Sales -0.8% M/M,Below Expectations>

--Total Sales Ex-Autos Down 1.8%; Volumes Down 0.8%

By Courtney Tower

     OTTAWA (MNI) - Canadian retail sales sank in December, by 0.8% from 

November, down in volumes, down in prices and far down from analyst 

expectations of a 0.1% monthly decrease, data from Statistics Canada 

showed Thursday. 

     The decreases were in six of 11 subsectors representing just 42% of 

retail trade. 

     Retail sales in volume terms were down the same 0.8% in December 

and came despite gains for motor vehicles and parts dealers and for food 

and beverage stores. In fact, excluding autos, retail sales plunged 1.8% 

on the month. 

     --TOTAL TRADE DISAPPOINTS 

     The 0.8% decline for total trade was the largest drop since March 

of 2016. The 1.8% drop for total trade excluding motor vehicles and 

parts and the 2.0% decline for total trade excluding motor vehicles and 

parts and gasoline stations were both the largest declines since January 

of 2015. 

     Gasoline station sales were down 0.8% on the month and up 8.0% on 

the year. 

     Despite these declines, total retail sales were up 1.5% in the 

fourth quarter last year (+0.6% in the third quarter). 

     In real terms, fourth quarter sales were up 0.9% and were down 0.1% 

in the third quarter, for an increase of 5.4% for the year. 

     For 2017 in all, retail sales were up 6.7%, the largest gains since 

1997. 

     --GENERAL MERCHANDISE DRAG 

     General merchandise stores contributed the most to the December 

decline, falling 5.3%, and explaining 80% of the decline. They were up 

6.7% year-over-year. 

     Excluding general merchandise, sales edged down 0.2% on the month, 

and were down 0.3% in volume. 

     Sales at health and personal care stores were down 3.8%, mainly due 

to weaker sales in Canada's largest province, Ontario. 

     Sales at electronics and appliances stores fell by a record 9.1% in 

December, following a record 12.7% gain in November, but were up 7.2% in 

the fourth quarter. 

     Motor vehicle and parts sales were up 2.1% in December, recovering 

from a 3.4% decrease in November, mainly on higher sales of new cars. 

     --FOOD, DRINKS RISE 

     Food and beverage stores were other large gainers in December, up 

1.4% on all store types but primarily on stronger sales at supermarkets 

and other grocery stores (+1.6%). 

     Although sales were down in six of the 10 provinces, the overall 

decline mainly came from Ontario (-1.6%) which had its first decrease in 

six months. 

     E-commerce sales, on an unadjusted basis, were C$1.9 billion in 

December, or 3.4% of total trade. Retail e-commerce was up 4.1% 

year-over-year. 

     For 2017, Statistics Canada said the higher retail sales had a base 

in stronger jobs growth, with Canada's unemployment rate falling by 1.1 

percentage points to 5.8%, the lowest rates on record. 

     In 2017, motor vehicle and parts led the annual increase, with new 

vehicles (mainly trucks) surpassing two million units in a single year 

for the first time. In dollar terms, Statistics Canada said, sales at 

motor vehicle and parts dealers (+9.0%) "were the largest contributor to 

the increase in retail sales in every province except Manitoba." 

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

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