| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.6% | 0.5% to 0.8% | 0.9% | 0.7% | |
| Year over Year | 3.4% | 3.8% | 3.6% |
Highlights
Despite a rising headline number, retail sales data reflected weakening consumer momentum in March combined with the inflationary effect of the Middle East conflict, the conundrum the Bank of Canada must face. The value of Canadian retail sales rose more than expected, by 0.9 percent from February, driven by higher prices. Sales were up 3.4 percent year-over-year.
The overall picture was weaker than the headline suggested, starting with volumes, more relevant to real GDP, which contracted 0.7 percent on the month, for a 12-month increase of just 0.1 percent.
Another sign of weakness, the monthly gain was concentrated in four subsectors, driven by a price-led 12.4 percent increase in gasoline and fuel. Real gasoline and fuel sales actually fell 1.9 percent.
Core sales, excluding gasoline stations and fuel vendors and motor vehicle and parts dealers, were down 0.1% on the month.
The three other subsectors recording increases were: health and personal care retailers (0.7 percent), clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (0.7 percent), and food and beverage retailers (0.5 percent).
While sales rose in just four categories, they increased across nine provinces, led by Ontario (1.4 percent), owing to gasoline and fuel sales.
By contrast, motor vehicle and parts sales were down 0.5 percent on the month. Sales excluding this sector were up 1.4 percent.
Housing-related sales conyracted in March, with building material and garden equipment and supplies down 2.9 percent, and furniture, home furnishings, electronics and appliances retailers down 0.2 percent.
Overall retail sales increased 2.1 percent in the first quarter, but 1.2 percent when adjusting for the price effect.
E-commerce sales increased 1.5 percent to C$5.1 billion in March, accounting for 7.1 percent of total retail trade, up from 7.0 percent in February.
Market Consensus Before Announcement
As usual, forecasters agree with the Stats Canada advance estimate that looks for sales up 0.6 percent in March.
Definition
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are reported in cash terms and disaggregated into eleven main subsectors. Aggregate volume figures are also provided.
Description
With consumer spending a large part of the economy, market players continually monitor spending patterns. Data are available both for total retail sales and those excluding autos and for 16 different store specializations. Since autos account for over 25 percent of retail sales, the sector can have a pronounced impact on overall sales given their volatility. Retail sales are used to estimate the goods portion of personal consumer expenditures in the quarterly GDP accounts, accounting for about 50 percent of the total.
The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.