Canadian Retail Sales Increase in October Fueled by Vehicle Purchases

OTTAWA — Retail sales in Canada saw a growth of 0.6 per cent in October, reaching a total of $67.6 billion. This increase was primarily driven by a rise in vehicle sales, as reported by Statistics Canada on Friday.

When looking at core retail sales, which exclude categories that can be quite volatile such as gasoline stations, fuel vendors, and motor vehicle and parts dealers, the gain was more modest at 0.2 per cent.

This core measure's growth was a decline from the stronger 1.4 per cent increase seen in September. According to Statistics Canada, the preliminary estimate for November indicates that retail sales remained relatively stable, showing little change.

CIBC senior economist Andrew Grantham noted that this gradual growth outside of the automotive sector, combined with the forward-looking estimate for November, suggests a potential slowdown in retail sales. He mentioned, “It appears that growth in retail sales volumes is taking a breather following the surge seen in Q3.”

In terms of volume, retail sales were stagnant in October.

The automotive industry reported the most significant increases in sales, particularly with a 2.5 per cent rise in both new and used car dealers.

On the other hand, sales at gasoline stations and among fuel vendors decreased by 0.5 per cent in October, marking the sixth consecutive month of declines.

In the core measure, higher sales at furniture, home furnishings, electronics, and appliance retailers contributed to the overall gains, with these categories experiencing a 2.5 per cent increase.

Conversely, food and beverage retailers faced challenges, recording the largest decline of 0.7 per cent in October.

Grantham also pointed out that the unchanged estimate for November could be influenced by the federal government’s announcement of a GST holiday, although more clarity will emerge once December’s data is available.

Despite the slower gains in October compared to the previous month, the overall trend remains positive. Grantham noted, “Even though the latest release wasn’t as strong as the prior one, consumer spending has still improved relative to the trend seen earlier in the year.”

Retail, Sales, Economy