Data released on Wednesday showed a larger-than-expected decline in retail sales in Canada in April; the preliminary numbers point to another slide for May. According to analysts at the National Bank of Canada, sales will rebound in June. They noted that retail sales are still above the pre-pandemic level.
Key Quotes:
“Retail sales posted their largest contraction in a year in April, falling from an all-time high to C$54.8 billion. Nonetheless, retail sales remain 5.4% above their pre-pandemic level. The epidemiological situation forced the closure or engendered limitations on many retailers in the country, especially in the provinces of Ontario and Manitoba where caseloads increased drastically.”
“Surprisingly, Statistics Canada noted that only 5% of shops were closed at some time during the month, up from 2.1% in March. Losses were relatively widespread by category, but it goes without saying that non-essential retailers bore the brunt of the decline.”
“Looking at the quarterly picture, after having increased in the first quarter of the year, nominal retail sales are on track to decline in the second quarter (including the early estimate for May). We expect a rebound to occur in June as sanitary measures are phased out which should set the table for strong consumption spending in the third quarter.”