Canadian Retail Sales Turn Negative in December and January Too
Retail sales turned negative in Canada, as covid restrictions returned
Retail sales turned positive in Canada last summer, after the big dive in Spring due to the coronavirus lock-downs. They kept increasing for 7 months, but as the coronavirus restrictions and lock-downs in some parts returned, sales declined again.
December showed a bigger decline than expected, while the first look at January’s numbers also shows the negative trend continuing. USD/CAD continues to decline though, as we mentioned in the previous update.
Canadian retail sales for December 2021
- Prior was +1.3%
- Ex autos -4.1% vs -2.4% expected
- Prior was +2.1%
- Sales down in 9 of 11 sub-sectors
- Sales up 1.2% in Q4 compared to Q3
- Approx 15% of retailers were closed during December
- Advance January sales -3.3%
- Sales at clothing stores down 17.0%
- Sporting goods, hobby, book and music -22.5%
- Electronics and appliance stores -12.8%
- Home furnishing stores -7.0%
This is the first decline after 7 consecutive increases and it looks like January will decline again as tighter lockdowns were implemented. Looking through the harshest category drops, they were focused in the truly discretionary categories. I think that points to a good chance of surging pent up demand in a true reopening. But at the same time, when a book store reopens, how many extra books are you going to buy? The boom in car sales also appears to be ebbing in both the US and Canada. That bears watching.
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