Canada: Retail sales to lose some momentum – NFB

Data released on Friday showed retails sales rose on November more than expected in Canada. The seven-month positive streak is at risk, the preliminary number from December point to a decline. Analysts at the National Bank of Canada expect retail sales to lose some momentum in the last month of the year considering the deterioration of the health situation. 

Key Quotes:

“The November retail sales report came in stronger than expected, with headline outlays reaching a new all-time high (C$55.2 billion, or 5.6% above the pre-pandemic peak). Following November’s gains, spending stood above pre-crisis levels in 9 of the 11 retail subsectors covered.”

“Some segments continued to suffer from the effects of the pandemic, namely gasoline stations (-18.5% vs. February) and clothing (-13.8%).”

“Retailers have been able to rely more on their online sales (which are not included in retail sales) since the beginning of the crisis, as they increased by 75.9% compared to November 2019.”

“Given the deterioration of the health situation in several provinces of the country, we expect retail sales to lose some momentum in the last month of the year, as Statistics Canada suggested goods spending decreased in December.”

“Statistics Canada’s preliminary estimate for December suggested nominal retail sales decreased by 2.6% from November.”