After two months of strong gains, Canadian retail sales fell an unexpected one per cent in March. According to Statistics Canada, this decline comes as consumers bought fewer cars and home furnishings.
Economists forecasted a 0.6 per cent drop for this period, despite February’s slightly higher revision to a gain of 0.6 per cent. In terms of volume, March’s sales declined by 1.3 per cent.
Sales in the auto industry dropped 2.9 per cent as Canadians bought fewer new and used cars. Excluding this segment, overall sales were down just 0.3 per cent. Additionally, purchases at furniture stores fell 3.7 per cent, while lower prices pulled sales at gasoline stations to their lowest since August 2010 with a 1.1 per cent decline. Overall, sales were down in 6 out of 11 sectors, making up 74 per cent of the retail trade.
Despite the expectation for first-quarter growth to be relatively strong, recent data has suggested that the economy is beginning to cool as the second quarter begins. Additionally, the recent wildfires in Alberta have disrupted oil production in the region, creating an expectation for further declines in the second quarter. However, economists expect to see a rebound toward the end of the year.
“This followed two extremely strong months, and I don’t think it takes away from the broader picture that the Canadian consumer has held up remarkably well so far in 2016,” says BMO Capital Markets economist Doug Porter.
You might take this dip as a chance to look over which of your merchandise is selling well and which isn’t. As the luxury market becomes more accessible and consumers look to purchase more opulent goods, retailers must adapt to a new set of needs.
