Canadian retail sales marked a fifth straight monthly gain in May, climbing 1 percent to $73.7 billion, according to the latest data from Statistics Canada. This increase pushed sales up from $72.95 billion in April, or US$52.35 billion. In volume terms, which strip out price changes, sales edged up 0.3 percent, their first gain in three months.
Sales climbed across all nine subsectors, with gasoline stations leading the monthly gain. Receipts at these stations and fuel vendors rose 3.1 percent even as sales volumes in that category fell 2.7 percent. This dynamic suggests that while people are buying less fuel by volume, the price per unit is pushing the total dollar value up.
Core retail sales, which exclude gasoline and motor vehicle and parts dealers, rose 0.9 percent after a 0.7 percent decline in April. General merchandise retailers led this category with a 1 percent increase. Motor vehicle and parts dealers, the largest subsector at about 27 percent of retail sales, gained 0.7 percent, while food and beverage retailers added 0.5 percent. Supermarkets and other grocery retailers saw a 1 percent boost, and sales rose in nine of ten provinces.
The dollar value of online sales bucked the broader trend, falling 1.5 percent to $5.0 billion. This decline brought online sales down to 6.8 percent of total retail trade, a drop from 7 percent in April. The flash estimate points to a further 0.4 percent rise in June, though Statistics Canada cautioned the reading will be revised.
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Retail sales serve as an early indicator of GDP and account for about 40 percent of consumer spending. While the headline figure leaned heavily on prices, Shelly Kaushik, a senior economist at BMO Capital Markets, said that beyond the gas price increase, retail sales were solid in May. The Canadian Chamber of Commerce’s Business Sales Tracker, which draws on Moneris card data, showed nominal spending accelerated to 5.9 percent year over year in May, with real spending rising 2.7 percent and real spending per person up 1.9 percent.
Regional performance varied, with British Columbia posting the largest dollar gain at 2.1 percent on higher motor vehicle sales. Vancouver specifically saw a 3.4 percent increase. Ontario advanced 0.5 percent, and Toronto rose 0.8 percent. Nova Scotia was the only province to record a decline, at 0.8 percent.
As crude oil prices jumped 6.2 percent to US$92.40 a barrel following Houthi attacks on two Saudi oil tankers in the Red Sea, the loonie traded 0.1 percent higher at 1.4075 per US dollar. The Financial Post reported that Brent crude reached US$100, a level that further influences the energy-heavy Canadian economy.
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