Sales at Canadian retailers grew by 0.9 per cent to $60.7 billion in April, an encouraging sign that consumers are still willing to open their wallets in the face of higher prices.
Statistics Canada reported Tuesday that sales at general merchandise stores led the way with 4.2 per cent growth during the month. Sales at miscellaneous niche retailers like pet stores, cannabis stores, office supply stores and pool retailers were up by even more — 11.2 per cent.
Sales also increased at:
- clothing and accessories stores (up 2.6 per cent).
- health & personal care (up 0.8 per cent).
- electronics & appliances (up 1 per cent).
Ksenia Bushmeneva, an economist with TD Bank, said it was good to see that higher prices don't seem to be detering consumers from opening their wallets, but time will tell if the trend can continue.
"We expect to see some continued moderation in retail sales volumes as spending on goods gives way to rebounding spending on services, such as concert tickets, vacations and dining-out," she said. "Already changing consumer preference have caught some retailers off guard, with too much inventory of items where demand has been easing."
Indeed, not all stores saw higher sales.
On the other side of the ledger, sales fell by 1.6 per cent at beer, wine and liquor stores and by 0.3 per cent at supermarkets and other grocery stores.
The biggest sales drop was seen at building material and garden equipment and supplies dealers, which slumped by 4.3 per cent. And sales at new car dealerships slipped by 0.8 per cent.
On the whole, so-called core retail sales, which strips out volatile things like gas stations, increased by 1 per cent.
And it wasn't just higher prices boosting receipts, either. In volume terms, sales were up by 0.9 per cent during the month.
Shelley Kaushik, an economist with Bank of Montreal, described the retail sales numbers as "solid."
"[But] it's clear that price pressures and more aggressive Bank of Canada rate hikes are weighing on consumer sentiment—and neither shows any sign of letting up in the coming months.
Statistics Canada says retail sales rose 0.9 per cent to $60.7 billion in April, boosted by gains at general merchandise stores.
The agency also says its early estimate for retail sales in May suggests a gain of 1.6 per cent for the month, but cautioned the figure would be revised.
Retail sales in April were up in six of the 11 subsectors tracked by Statistics Canada, representing 43.3 per cent of retail trade.
Sales at general merchandise stores gained 4.2 per cent, while sales at miscellaneous store retailers, which includes pet stores, cannabis stores, office supplies and stationery stores and pool retailers, rose 11.3 per cent.
Core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — rose 1.0 per cent.
In volume terms, retail sales gained 0.9 per cent in April.
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