Statistics Canada latest retail sales numbers for April 2014 indicate a strong gain, up a seasonally adjusted 1.1% from the previous month. On a not seasonally adjusted basis, the gain was much higher, and up 6.1% from April a year ago. Much of the reason for this however is Easter, which was in April in 2014 but in March last year. A complication is that seasonal adjustment is an estimate based on historical trends which may be off for the current year.
The 3 month year-over-year growth trend (orange line in the chart above) however takes the timing of Easter out of the picture. For total retail, it's up 4.4% for the 3 months ending April, the strongest such gain in over 2 years, and ticking up to just above the underlying 12 month trend (green line). This appears to be a reversal of course, but it's too early to claim a trend, especially after digging a little deeper.
Overall, the April uptick appears to be a result of unusually high sales growth at convenience stores, specialty food stores, beer, wine & liquor stores, department stores, and gasoline stations. Rather than a trend, this is more like a coincidence.
Total retail sales growth is still being driven by the Automotive & Related sector, up 7.6% versus last year for the 3 months ending April. The Food & Drug group had relatively strong sales in April, with the best single month gain in 2 years. The Store Merchandise sector however continues with only modest growth.
Food & Drug Stores
Health & personal care stores' retail sales have had strong gains for the last 7 months. For the 3 months ending April 2014, sales were up 9.6% from a year ago, and this continues to shore up the overall Food & Drug sector.
Sales at supermarkets & other grocery stores however are still struggling, up just 0.1% for the 3 months ending April. In fact, their sales are down 0.1% on a 12 month basis.
In contrast, specialty food stores' retail sales are maintaining a high growth rate. Their sales gained 9.3% for the 3 months ending April versus the same period last year.
Overall, the Food & Drug sector was up 3.2% on a 3 month basis. While not outstanding, this was still ahead of the 12 month trend of 2.1%.
Store Merchandise retail sales were up 2.9% for the month of April versus a year ago on a not seasonally adjusted basis, indicating that Easter's timing had minimal effect. For the 3 months ending April, sales were up just 2.0%, which is below the 12 month trend of 2.7%, as per the chart below. In other words, things are slow and getting slower.
The only strong performer in this sector is other general merchandise stores, which are mostly large combo stores as distinct from conventional department stores. Their sales were up 7.8% for the 3 months ending April, which is more or less on a par with how their sales have been growing for the last 12 months.
A number of store types however had sales declines for the 3 months ending April versus a year ago: building material & garden equipment/supplies retailers, down 2.5%; miscellaneous store retailers, down 2.5%; furniture stores, down 2.1%; and shoe stores, down 1.3%.
Automotive & Related
Sales in the Automotive & Related sector were up 7.6% for the 3 months ending April, three times higher than for all other retailers combined. Current trends (see chart below) indicate some leveling off, but at a pace well above Store Retail.
Automobile dealers' retail sales were up 6.3% for the 3 months ending April versus last year. This was stronger for used car sellers (9.6%) than for new (6.0%).
With higher prices, gasoline station retail sales were up 15.0% year-over-year in April 2014 alone, the largest increase since October 2011.
Ed Strapagiel is a consultant specializing in applied marketing, business development and strategic planning. [Ed Strapagiel's Website]