Retail spending in Canada shows signs of slowdown amid higher inflation, interest

Retail spending in Canada confirmed early indicators of a slowdown simply as the vacation procuring season ramped up this fall, in accordance with new figures from Statistics Canada launched Tuesday.

Preliminary numbers for November recommend a pullback in retail gross sales, the federal company stated.

The studying got here as greater costs for fundamentals like fuel and meals helped enhance retail gross sales 1.4 per cent to $62.0 billion in October. However, general retail spending was unchanged in quantity phrases for the month.

The information factors to “a continuation of the stagnant trend that has persisted throughout this year,” CIBC Capital Markets senior economist Andrew Grantham stated in a consumer word.

Statistics Canada’s early figures for November indicated a weakening of spending on items — regardless of Black Friday gross sales sweeping shops on the finish of the month.

The company’s preliminary estimate pointed to a 0.5 per cent drop in retail gross sales final month, however cautioned the determine can be revised.

The numbers recommend items spending “is going nowhere fast, with inflation and higher interest rates denting households’ desire and ability to increase spending volumes,” Grantham stated.

While spending on providers is anticipated to be a small vibrant spot within the final quarter of 2022, even that might fade within the new yr, he added.

“As we move into 2023 and higher interest rates start to impact a greater proportion of households, even services spending could begin to struggle,” Grantham stated.

For October, greater costs boosted gross sales at gasoline stations by 6.8 per cent, however fuel station gross sales in quantity phrases fell 3.3 per cent.

Sales at meals and beverage shops rose 2.2 per cent, led greater by supermarkets and different grocery shops, which gained 2.5 per cent.

Core retail gross sales in October — which exclude gasoline stations and motorcar and components sellers — rose 0.9 per cent.

Meanwhile, gross sales on extra discretionary gadgets appeared to sluggish.

Sales at furnishings and residential furnishings shops dropped one per cent in October in contrast with the earlier month.

Electronics and equipment shops recorded a 0.9 per cent decline in gross sales, clothes and clothes equipment shops noticed gross sales fall 0.6 per cent and gross sales at sporting items, pastime, e book and music shops had been down 0.5 per cent, Statistics Canada stated.

This report by The Canadian Press was first revealed Dec. 20, 2022.