Retail sales grow 1.1 per cent in April as consumer resiliency continues
OTTAWA –
Canadian retail gross sales got here in stronger than initially estimated, as analysts say shoppers proved resilient amid an economically difficult setting however that momentum is anticipated to gradual.
Retail gross sales rose 1.1 per cent to $65.9 billion in April, Statistics Canada reported Wednesday, topping its preliminary estimate for the month that pointed to a rise of 0.2 per cent.
Gains at common merchandise retailers and meals and beverage shops led the best way greater.
The company’s advance estimate for May urged a acquire of 0.5 per cent for that month, although it cautioned the determine can be revised.
BMO economist Shelly Kaushik mentioned the figures present Canadian shoppers continued to spend however “higher prices drove most of the increase as spending volumes rose at a much slower pace.”
In quantity phrases, retail gross sales rose 0.3 per cent for April.
“Looking ahead, momentum in consumer spending is expected to slow in the second half of the year, as yet higher interest rates and still-elevated inflation continue to weigh on purchasing power,” Kaushik wrote in a report.
The Bank of Canada raised its coverage rate of interest by 1 / 4 of a proportion level earlier this month to 4.75 per cent, a transfer that prompted the nation’s huge banks to boost their prime charges.
The central financial institution has raised considerations that inflation appears to be extra sticky than anticipated and shall be more durable to get it again right down to its two per cent goal.
Retail analyst Bruce Winder mentioned he’d anticipated a lower or minimal improve in April’s retail gross sales figures.
“We all expected that the tide would turn just because there’s so many headwinds,” he mentioned.
“You’ve got interest rates. Inflation, especially in food, is still high. You’ve got job loss in the tech sector, you’ve got a lot of things going against the consumer.”
He additionally famous that buyers are at “an all-time high with household debt,” particularly following a interval of excessive spending popping out of the pandemic.
“I thought for sure they would take a break. But it’s something that we’re seeing a bit of a surprising resilience in consumer spending,” mentioned Winder.
“Is it because credit is so easily available? Is it because consumers still have some of that revenge spending they want to do?”
Winder mentioned it is doable the rise can also be associated to components comparable to inhabitants progress, together with Canadians more and more returning to workplace, prompting them to spend extra on merchandise.
Statistics Canada mentioned gross sales at common merchandise retailers rose 3.3 per cent in April, whereas meals and beverage retailers noticed a acquire of 1.5 per cent.
Sales at motorcar and components sellers gained 0.5 per cent in April, helped greater by a 3.7 per cent rise at used automotive sellers and a 3.5 per cent improve at automotive components, equipment and tire retailers.
Sales at furnishings, dwelling furnishings, electronics and equipment retailers fell 1.6 per cent.
Core retail gross sales — which exclude gasoline stations and gas distributors, and motorcar and components sellers — gained 1.5 per cent in April.
This report by The Canadian Press was first revealed June 21, 2023.
