Canadian retail sales may be on the way up

Ed Strapagiel's most recent analysis shows that modest retail sales growth could be a sign that recent troubles may soon pass.
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While Canadian retail sales are not out of the woods just yet, there is a clearing in the thicket.

While overall sales were lukewarm, growing by only 0.8% year-over-year for the three months ending in February, they are still above “scraping bottom,” as analyst Ed Strapagiel put it, hovering around a low water mark in recent months.

Food and drug retail sales were up 3.4% year-over-year, the highest gain for any of the major sectors, with strength in grocery and health and personal care stores leading the charge. Convenience stores and specialty food stores had gains of 4.5% and 3.9%.

Growth in the store merchandise sector, however, continues to weaken according to Strapagiel’s analysis. Overall growth was a stagnant 1.1%, dragged down by an 11.3% decline in electronics and appliance stores. Sporting goods, hobby, book and music stores were also laggards, down 4.5% for the same period, with jewelry, luggage and leather goods down 4.4%. On the positive side, department and clothing store sales were up 4.1% and 3.8%, respectively. Miscellaneous store retailers’ sales were up 7.4%, but Strapagiel says “about half” of this is due to the addition of cannabis stores within the category.

The automotive and gasoline sector, Strapagiel’s analysis shows, has been plummeting since its records of the previous few year. For the three months ending in February, new car dealer retail sales were up a mere 1.8% year-over-year, with gasoline station retail sales were down 9.4%. However, the gains in automotive, while small, were the category’s best over the last year, and rising gas prices could lead to some gains in that category as well.

Canadian e-commerce sales were up 13.2% per year-over-year for the reporting period ending in February. That accounted for 3.5% of total sales domestically for the same period.