Canadian Retail Sales Bounce Back After Second-Wave Lockdown
(Bloomberg) -- Canadian retailers got a boost in February after public-health authorities lifted lockdowns.
Retail sales rose 4.0% on the month, preliminary data released on Friday by Statistics Canada show. The bounce-back comes after a 1.1% drop in receipts in January and a 3.7% decline in December, when many businesses were forced to close because of a second wave of Covid-19.
But the February numbers suggest the worst is over as the economy emerges from the containment measures. Based on the preliminary estimates, sales were 4.6% above year-ago levels.
“The strong February estimate is welcome news -- likely driven by a rebound in Canada’s two largest provinces -- and bodes well for the economy as it continues to heal from last year’s trauma,” Benjamin Reitzes, a rates and macro strategist at Bank of Montreal, said in a report to investors.
Canadian retailers should continue to benefit from the reopenings, however the threat of a third wave could provide a setback. Until a vaccine is widely available, in-store shopping is likely to face continued restrictions on capacity.
The drop in sales in January was broad-based, with a 17.8% drop at clothing stores the biggest downward contributor. Furniture store sales as well as recreation and hobby store sales declined, falling 15.1% and 16.8% respectively. General merchandise stores, however, saw a 3.3% increase. Many of those stores are considered essential and were allowed to remain open during lockdowns.
Gasoline stations recorded another monthly gain as a result of higher energy prices, but auto sales fell. Excluding autos, retail sales were down 1.2% in January.
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