Retail Sales Disappoint Again as Canadian Growth Slows

Updated on
  • Receipts increase just 0.1% versus forecasts for 1% gain
  • Sales stall since June after one of best starts on record

The Death of the Department Store

Sales for Canadian retailers continued to disappoint in September, adding to evidence consumers are paring back in the second half of this year.

Retail sales rose 0.1 percent during the month, versus forecasts for a 1 percent gain, after dropping 0.1 percent in August, Statistics Canada said Thursday from Ottawa. Receipts for the country’s retailers have been flat over the past four months, after one of the best starts to a year for the industry on record.

It’s a slowdown that suggests the tailwinds spurring growth earlier this year are waning. That includes the effects of a ramp up in child benefits by the federal government last year that had a clear impact on consumption, but are now no longer adding to growth.

Thursday’s release is the last major piece of output data ahead of third quarter gross domestic product numbers next week, and is the second release this week that showed unexpected weakness in activity. Statistics Canada reported Tuesday that wholesale sales fell 1.2 percent in September.

Economists are estimating annualized third-quarter growth of 1.8 percent, down from 4.5 percent in the second quarter.

“The stalling in recent figures on the economy support our view that the Bank of Canada is likely on the sidelines until the spring of next year,” Nick Exarhos, an economist at CIBC World Markets, said in a note to investors.

The Canadian dollar fell as much as 0.2 percent to C$1.2723 per U.S. dollar after the retail report.

Details of September Retail Sales

  • Retail sales rose 0.1% versus forecasts for 1% gain
  • In volume terms, sales fell 0.6% and are down 1.3% since June
  • Excluding gasoline stations and motor vehicle sales, receipts were down 0.1%
  • Falling auto and clothing sales offset higher gasoline prices
  • Receipts of car and parts dealers were down 0.5% in September
  • Excluding car dealers, sales were up 0.3% versus expectations for a 1% gain

— With assistance by Erik Hertzberg

    Before it's here, it's on the Bloomberg Terminal.