Reports of strong sales growth may be overblown

Despite optimism leading up to the holiday season, year-over-year losses hit multiple categories.

Optimism about the growth of Canadian retail sales in October might have been a bit premature, according to the latest numbers from retail analyst Ed Strapagiel.

Prior to the holidays, several outlets looked at the latest Statistics Canada retail sales numbers and noted that the 1.1% month-over-month sales increase was higher than most market expectations and was the second-highest increase for 2016, behind a 2.1% increase in January.

But looking at the statistics on a year-over-year basis, October retail sales were up by only 0.4%, and losses hit stores in several different sectors.

Health and personal care stores did continue to show strength, up 2.9% in October and 7.4% for the year-to-date, with beer and liquor stores seeing a 2.1% sales growth.

Other stores in the food and drug sector were not as lucky, though. Supermarkets and other grocery stores saw a 3.4% sales decline in October, with the usually reliable convenience store sales down slightly at 0.3%. Specialty food stores were hit especially hard, with sales falling by 5.9%.

While store merchandise sales were up 2.1% in October, that is still the sector’s lowest sales growth so far in 2016. The biggest decline (at 3%) was in jewellery, luggage and leather goods stores, with home furnishing sales down 1.7%, clothing sales down 0.8% and sporting, hobby, book and music sales down 0.2%.

Shoe sales continued to be strong at 5.8% growth, while furniture sales grew by 2.7% and department store sales by 2.4%.

The previously booming car category continued to stagnate in October, with new car sales down 1.1%, though it was helped slightly by 2.5% growth at used car dealers.

One unlikely store category was among those that saw sales growth in October: gasoline stations, which experienced a 2.2% sales growth, its first in nearly two years.

Regionally, British Columbia was the only province to see significant sales growth in October at 5.2%. Prince Edward Island (2.2%), Ontario (1.7%) and Nova Scotia (1.1%) were the only other provinces to see growth, with Quebec experiencing a 0% change and Newfoundland and Labrador experiencing a 4.1% decline.

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