National retail sales strong over last 8 years: Stat Can

OTTAWA — Despite some bumps along the way, Canada’s retail trade industry has grown at a robust pace since the turn of the millennium.

A new study by Statistics Canada says national retail sales has in large part overcome sluggish demand in the US, the bust of the information and communication technology manufacturing sector, the appreciation of the Canadian dollar and higher energy prices.

The report provides an in-depth analysis of retail sales nationally and provincially between 2000 and 2004, comparing average growth rates during this period to those between 1996 and 2000.

Alberta retailers led the pack in terms of average growth in retail sales between 2000 and 2004. Sales in BC, Saskatchewan and Manitoba also surpassed the national average, while those in Newfoundland and Labrador and Quebec maintained relatively robust growth. In contrast, sales for retailers in Ontario and the other Atlantic provinces grew at a pace well below the national average.

Goods flew off Alberta shelves, while Ontario sluggish

Several factors have helped buttress retail sales growth, the report states. First, consumers spent an increasing proportion of their disposable income in retail stores, at the sacrifice of immediate savings, thanks to historically low interest rates and the housing boom.

Retailers in the West outperformed those in the East, largely because of higher retail sales growth in the automotive sector. This sector’s ability to dictate retail growth occurred, for one thing, because of its significant share of the consumer’s retail dollar. In 2004, automotive sales accounted for about one-third of total retail sales.

Nationally, retail sales remained robust between 2000 and 2004 despite a slowdown in growth rates for both real gross domestic product and disposable income. During this period, retail sales grew at an annual average rate of 4.8 percent, somewhat slower than the average of 5.9 percent between 1996 and 2000.

Nationally, the automotive sector recorded a drastic slowdown in growth since the turn of the millennium. Between 1996 and 2000, automotive sales grew at an average annual pace of 7.1 percent. In contrast, between 2000 and 2004, the growth rate was cut almost in half to 3.6 percent.

Before the millennium, this sector was responsible for 41 percent of overall retail growth. Between 2000 and 2004, its contribution was only 26 percent.

Given its significant share of consumer dollars, the automotive sector in turn dictated provincial retail growth. For example, Alberta’s $4.7-billion increase in this sector revenue represented over 40 percent of total growth in retail revenue between 2000 and 2004.

While Alberta retailers led the pack between 2000 and 2004 — highest in the country and well above the national average of 4.8 percent — Ontario experienced a significant retail slowdown, following a period of fast growth during the previous four-year period. This slowdown occurred mainly because of a lacklustre performance by the automotive retail sector.

Between 2000 and 2004, Ontario’s retail trade grew at an annual rate of 3.7%, half its average rate of 7.4 percent between 1996 and 2000.