We’re still spending less on consumer goods, suggesting Canadians are cutting back or perhaps diverting funds to servicing debts.
And with transition already well underway in the way we shop, Canada’s retail property owners will have taken little good news from the latest sales figures for retailers.
There was a slight improvement in sales in July (0.4% higher than in June) and it was also the first gain in three months; but sales were essentially flat from a year earlier when seasonally adjusted (1.2% unadjusted). The monthly gain was also weaker than expected by a panel of economists polled by Bloomberg.
With debt servicing costs reaching a record high in the second quarter, the data suggests households are being forced to curb their spending to manage their debts.
“Looking ahead, the tug-of-war between recent solid job and wage gains and high household debt will continue, suggesting that consumer spending will grow at a moderate pace over the near term,” said Christopher Heschl, senior economist at the Conference Board of Canada.
However, there were some bright spots: retail sales rose in 6 of 11 sectors, with sales at motor vehicle and parts dealers rising by 1.5% thanks largely to higher sales at new car dealers. With an increase of 14.3% supported by widespread gains across provinces, sales at cannabis stores topped $100 million for the first time.
Sales rose in six provinces, with Ontario and the Prairie provinces posting the largest increases. Québec and British Columbia both reported declines despite gains in each of their largest cities.