MNI DATA IMPACT: Canada Flash Jan Retails -3.3%, Dec -3.4%

Canada's retail sales showed significant weakness around the second wave of Covid-19, with figures Friday showing declines in the past three out of four months.

Statistics Canada's flash estimate of sales for January showed a 3.3% decline, following the official December sales figure falling 3.4%. The agency also revised the October result to a 0.2% decrease from the early estimate of a 0.1% gain. Economists expected a 2.6% fall in December sales.

Provincial governments began imposing new restrictions on gatherings and shopping including a curfew in Quebec around the end of last year, measures that are just being lifted. That triggered closures of about 15% of retail stores nationwide for an average of two days, StatsCan's report said. The Bank of Canada has said the economy likely shrank in the first quarter, although vaccine breakthroughs have solidified the medium-term outlook.

The flash January estimate didn't provide a detailed breakdown of the decline. In December the weakness was spread across nine of 11 industries making up 84% of total sales, led by general merchandise and clothing stores. Excluding autos and parts, sales fell 4.6% in December.

The official retail sales likely exaggerate the weakness in consumer demand, because they don't fully capture sales to U.S.-based online retailers like Amazon.

Sales declined 1.4% in 2020, the most since 2009 during the last major recession.

A separate report showed that flash wholesale sales rose 5.3% in January.