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Sunday, August 1, 2021

Canada May prelim retail sales -3.2% vs -5.7% prior

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Canada April retail sales report along with prelim May estimates

Canada May prelim retail sales
  • April retail sales -5.7% vs -4.9% expected
  • Estimates ranged from -2.5% to -6.0%
  • Statistics Canada advance estimate for April was -5.1% based on 46% of responses
  • March was +3.6%
  • April retail sales ex autos -7.2% vs -4.6% expected
  • Sales ex autos and gas -7.6%
  • Sales decreased in 9 of 11 subsectors, representing 74.2% of retail trade

The preliminary estimates for the month ahead are new since the pandemic but their track record is increasingly solid. The downward revision to the latest data is relatively modest and the number for May includes 62% of companies surveyed, so the discrepancy in the month ahead is likely to be even smaller.

There’s no consensus (yet) for the preliminary estimates. I would have guessed a bounce in May because some restrictions were lifted in Quebec. At the same time, a drop on the continued lockdown in Ontario and harsher May measures in Manitoba may have won out.

In any case, the market isn’t bothered by soft numbers because they’re a reflection of restrictions, rather than underlying demand. With the reopening in June there will be a pickup then and potentially a big jump in July, because it looks like a full reopening is in the cards with cases down dramatically and high vaccine takeup.

In terms of details, clothing and shoe stores were down +30% due to closures and general merchandise stores were down 8.1%. Building materials were also down 10.4% as Ontario went to curbside only shopping for all-but-the-most-essential items. Ontario sales were down 13.4% and Manitoba down 8.0% while other provinces were flatish.

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