Canada retail sales rose by 2.1% to CA$57.2 billion in August due to increases in both prices and volume of goods sold, according to data released by Statistics Canada on Friday, a promising sign for the country’s economic recovery. This increase was observed across all provinces in the first full month after provinces lifted restrictions designed to mitigate the spread of COVID-19.
The rise in retail sales was led by food and beverage stores, where sales went up by 4.8%, clothing stores, up 3.9%, and gasoline stations, with 3.8% growth.
August marked the first full month of the new normal for Canadians. All provinces lifted restrictions in July, when the vaccination rate among eligible adults surpassed 70%. The substantial increase in clothing store sales in August—following the trend from July—suggests Canadians were eager to return to in-person shopping.
The climb in gasoline sales could be attributed to two factors: the increase in gasoline prices plus Canadians driving more in August, the most popular travel month of the year, before school starts up again in September.
Prices of retail goods have shown no sign of slowing down. At the same time, inventory for several categories of consumer goods has gotten low or gone out of stock altogether. High prices, combined with a lack of options, might discourage consumers from spending. We will be eager to see in the September data whether retail sales decreased as a result, before potentially picking up again in the holiday season.
The takeaway
August’s retail sales were a bright spot in the recovery of the Canadian economy, with in-person shopping and recreational activities leading the way.
