April 24, 2024, 11:41 AM

Retail Sales Signal It's Quiet at Canada's Malls, Says BMO

Canadian retail sales dipped 0.1% m/m in February, a few ticks weaker than expected, and the early reading for March was also flat on Wednesday, noted Bank of Montreal (BMO).

Auto sales were firm, but gasoline station receipts fell 2.2% m/m which weighed on the headline. Excluding autos and gasoline, core retail sales were flat in the month, still a soft reading. Indeed, electronics (-2.8%), furniture (-1.0%), clothing (-1.0%) and building materials (-0.4%) were all down in the month, highlighting broad-based softness, while general merchandise added to the gain in autos.

Regionally, the performance was very mixed in February and remains so from a year ago, said the bank. Newfoundland & Labrador, Nova Scotia and Saskatchewan lead the growth table with better than 3% y/y prints, while Alberta lags (-2.1% y/y) largely because of weaker gas station sales.

Retail volumes fell 0.3% in the month, adding to the softness of the report. That leaves sales volumes up a modest 0.9% from a year ago, but a firmer 4.3% annualized over the latest six months -- the February dip stems from some decent recent momentum, stated BMO. Goods inflation has melted (1.1% y/y as of March versus 4.5% y/y for services), but these are still pretty sluggish volume trends considering 3%-plus population growth.

Canadian consumer spending continues to struggle with the impact of past rate hikes and, while sales volumes are fully retrenching, one has to view these trends as sluggish when the country is cranking out historic population growth, according to the bank. That said, the economy still looks on pace to post decent growth of around 0.2%-to-0.4% in February (the initial flash estimate was +0.4%), but the bank will see how March fares.

So far, the early read on retail and an even softer early look at manufacturing also out Wednesday (-2.8% m/m) suggest some softness. All in this data flow should keep a June Bank of Canada (BoC) rate cut on the table, inflation willing, added BMO

http://www.mtnewswires.com
Copyright © 2024 MT Newswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

Market data, news, and company information provided by Interactive Data. Copyright © 2016. Terms of use. Earnings estimates and analyst ratings provided by Zacks. News provided by The Associated Press and MT Newswires, a division of MidnightTrader, Inc. Hemscott equity data provided by Morningstar, Inc. Analyst reports provided by Argus Research Company and Marketgrader.com. Share details provided by EDGAR Online. Economic events copyright 1999-2016 Econoday, Inc. Earnings events provided by Wall Street Horizon. © 2016 Wall Street Horizon, Inc.

« Previous page