Retail sales in Canada decreased by 0.6% in September, to CA$56.6 billion, as a severe shortage of semiconductor chips slowed production in the auto industry, according to data released by Statistics Canada on Friday.
The drop was almost entirely driven by sales of motor vehicles and parts, which decreased by 1.6%. While new car sales dropped by 2.8%, used car sales jumped by 6.3% as consumers turned to used cars when new cars were either not available or had become too expensive.
The decline is the latest sign of the dramatic impact that supply chain bottlenecks have had on the recovery, especially in the auto industry as automakers have not been able to keep up with demand.
Gasoline receipts rose for the fifth consecutive month, but with summer road trips coming to an end, this increase is attributed to climbing gasoline prices rather higher sales volume.
In the core retail sectors, after a strong summer, sales at clothing stores fell by 5.9%, a sign of pent-up demand waning. The pandemic-induced shutdown of production in Vietnam, where the bulk of clothes are produced, also contributed to the drop.
The holiday season might have an uptick in sales as shoppers increase their discretionary spending, but with the supply chain bottlenecks not yet resolved, consumers this year will most likely be paying more to buy fewer goods.
