Canadian retail sales rebound in May after record decline
Photo: Hangar9 on Richmond Street
CANADIAN RETAIL SALES rebounded sharply in May after historic declines in March and April, Statistics Canada reported Tuesday.
Receipts rose 19 per cent in May, the agency said in its first full release for the month. June looks to have recorded another strong gain, with a flash estimate predicting another 25 per cent increase.
Depending on the source of calculations, sales were between 80 and 100 per cent of February levels.
The report confirms Canadian consumers are emerging from nationwide lockdowns with pent up demand and keen to spend. At issue is whether the sharp rebound will be sustained into the second half of the year. Policy makers have warned a full rebound in consumer confidence could take years.
“At the moment, sales are still being buoyed by the enormous government income-support programs and consumers satisfying pent-up demand, both of which could fade in the second half of the year,” Royce Mendes, an economist at CIBC World Markets, said in a report to investors.
Auto sales led the pick up in receipts in May, jumping 66 per cent. Excluding auto vehicles and parts, retail sales were up 10.6 per cent on the month.
Economists on average had expected a 20 per cent increase in May, and a 12 per cent increase excluding autos, according to financial markets data firm Refinitiv.
Even with the increase in May and June, the second quarter will go into the books as among the worst ever for Canadian retailers. Based on the June flash estimate, quarterly sales were down 15 per cent in the three months from the prior period.