Supply Shortages Impact Retail Sales

Retail sales were down 0.6 per cent to $56.6 billion in September, says Statistics Canada. The decline was led by lower sales at motor vehicle and parts dealers (-1.6 per cent) as new car dealer sales (-2.8 per cent) continued to struggle amid global supply shortages for semiconductor chips. Sales decreased in seven of 11 subsectors, representing 63.5 per cent of retail trade. In volume terms, retail sales decreased 1.1 per cent in September. Based on respondent feedback, 0.5 per cent of retailers were closed at some point in September, compared with approximately 0.6 per cent in August. This is the third straight month that less than one per cent of retailers experienced closures. Statistics Canada’s advance estimate of retail sales suggests that sales increased one per cent in October. Core retail sales decreased 0.3 per cent in September as the Bank of Canada's quarterly monetary policy report noted that as the impacts of the COVID-19 pandemic recede and confidence rises, spending on services such as travel and accommodation is expected to continue to strengthen, while growth in demand for goods may moderate. On a seasonally adjusted basis, retail eCommerce sales rose 5.1 per cent in September.