Canadian retail sales are on course to reach a low in 2018, according to the most recent Statistics Canada data examined by analyst Ed Strapagiel.

Based on data for the first 10 months of last year, Canadian retail sales growth was up 3.3%. This represents an overall decline in growth, Strapagiel notes, as year-over-year gains for the three months ending October 2018 reached a meagre 2.4%. Should the trend continue, annual sales in 2018 will clock in at less than half the 7.1% gains recorded in 2017. What’s more, “There doesn’t appear to be anything on the horizon to indicate that things are going to improve soon,” writes Strapagiel, “although recently rising gasoline prices may provide some false optimism.”

After reaching a nearly 20-year high in 2017, retail sales declined for much of last year. Now, a persistent dip in sales growth across many sectors has resulted in a three-month trend line below the underlying 12-month trend – representing a potential further growth decline.

Health and personal care, flat at only 0.4% growth in the three-month period ending in October, are down 0.1% for the year. After an unusually strong showing in 2017, the store merchandise category has also dropped to 2.5% gains for the three-month period, the lowest growth rate in a year and a half, notes Strapagiel. Year-over-year retail sales have also suffered in furniture stores (down 1.8%), in building material and garden equipment/supplies dealers (down 1.3%) and in home furnishings (up only 0.4%).

The automotive sector has been hit particularly hard; having reached nearly 10% gains in 2017, growth has been cut in half over the last twelve months.

A few sectors continue to perform relatively well, however. Sales in food and drugs appear to be leveling out (up 2.6% year-over-year) but are still likely to end at a five-year low. Supermarkets and other grocery account for around half of overall retail sales, and were up 2.6% of the three-month period ending October 2018. Convenience stores, specialty food stores, and beer, wine and liquor stores continue to see above-average gains, and sales have been relatively strong in electronics and appliances (up 5.8% over three months).

Miscellaneous store retailers saw gains of 9.2% year-to-date. As of October 2018, cannabis stores (which saw sales of $43 million for the month) will be included in the category, but Strapagiel predicts they will remain “only a small part” of the overall retail sales picture, despite growing over time.

The analyst also warns that gas prices have “tended to distort the retail sales picture in recent years,” including 2018. Excluding sales at the pump, overall sales growth drops from 3.3% to 2.3% year-over-year. “Due to international economic uncertainty, gasoline prices are likely to remain volatile for some time to come,” notes Strapagiel.

For the twelve months ending October 2018, e-commerce sales from both pure-play operators and bricks-and-mortar stores represented roughly 2.8% of Canadian retail sales. (Those figures do not include sales made on foreign websites.) E-commerce sales for the three-month period ending in October were up 16.9%, an impressive double-digit gain but still less than the 26.5% recorded during the same period the year before.