Reports that the sky is falling in Canadian retail sales are greatly exaggerated. Almost all the recent decline in total retail growth is due to lower gas prices, while other retail sectors are performing within or better than their normal range of variation. Gasoline stations account for about 12.5% of total retail, so a major sales decline in this subsector is a significant drag on the overall total.
Gasoline station retail sales declined 21.3% in January 2015 versus a year ago on a not seasonally adjusted basis, so that total retail was up only 0.5% for the month. Excluding gas stations however, the rest of retail was up 4.2% in January year-over-year, and up 4.9% for the 3 months ending January.
The underlying 12 month trend for total Canadian retail sales (green line in the above chart) is now headed downward. The 3 month trend (orange line) has weakened considerably, indicating more of the same ahead, at least until gas prices recover.
While Automotive & Related suffers however, the Food & Drug and Store Merchandise sectors are actually stable or strengthening.
Food & Drug Stores
The Food & Drug sector continues to crawl along, but at least it's crawling in the right direction. The underlying 12 month trend (green line in the chart above) has been slowly improving for about a year and a half, and is up to 3.0% for the 12 months ending January 2015. This is hardly spectacular, but it is a 4 year high.
Food & beverage stores had a good January, with retail sales up 5.2% year-over-year, which is almost double their average. On the other hand, health & personal care stores had a relatively slow month, up 1.6% from January last year, or roughly half their previous average. These ups and downs are typical for the sector.
The Store Merchandise sector is emerging as the place to be for 2015. The 3 month trend (orange line) is still running ahead of the underlying 12 month trend, which has been improving for about 18 months and is now at a 5 year high.
Almost all store types had respectable sales gains in January 2015 compared to the same month a year ago, particularly clothing stores, jewellery, luggage & leather goods stores, and electronics and appliance stores. Only miscellaneous store retailers turned in a decline for the month.
Automotive & Related
The Automotive & Related sector appears to have fallen off a cliff. This is almost all due to lower gasoline prices, particularly as compared to the very high prices in place a year ago.
At the same time, new car dealers' sales were up "only" 4.7% in January 2015 year-over-year. This would be a good result for most retailers, but it is well off the 8.5% gain new car dealers recorded for 2014 overall. Used car dealers and other motor vehicle dealers also had an off month in January.
For definitions of store types, see Statistics Canada.
Monthly Update Notification
This analysis is updated monthly as new numbers are published by Statistics Canada. If you would like notification of when an update becomes available (and you've read this far), please connect with Ed Strapagiel on LinkedIn.