As the population grows, sales contract, a sign that times are tough for families. Canadians continued to consume less in July, according to the most recent figures.
“The consumer continues to be defensive, which is normal. Pressures come from everywhere,” observes Jimmy Jean, senior economist at Desjardins.
With interest rates set to remain high for quite a while, he says, it’s just going to continue over the next few months.
In July, retail sales fell 0.1% compared to June, indicates Statistics Canada (constant 2017 dollars). It was the same story in June and May, making three consecutive months of declining sales volume in the retail sector.
The forecast for August is in the same direction, which would be four months behind us.
“Four months in a row of falling sales is generally what we see when a recession sets in,” says Jimmy Jean, who has been announcing the coming recession for many months now.
The categories in decline for July are almost all car-related: new car dealers (-2.9%), used car dealers (-4.6%) and other motor vehicle dealers ( -1.7%).
Construction materials and gardening equipment and supplies dealers also experienced a decline of 0.6%.
Short-term decline
Statistics Canada data clearly reflects the reality of the hardware sector, for example.
“There are fewer people coming into the store. The slogan is given for a form of short-term decline,” summarizes Dominique Bélanger, owner of a Rona store on Masson Street, in Montreal.
For the months of July and August, the number of transactions in its store fell by 4%. If we take the months of May to August, the drop is 6%.
This is a reflection of what the industry is experiencing in general, he says.
“It has an impact on turnover, which is falling as much as the number of transactions,” recognizes the entrepreneur.
Store owners like him know very well that sales will become more and more difficult, that the good times of the pandemic are behind us.
“We are returning to our old loves”, illustrates Dominique Bélanger, i.e. to the figures for 2019.
It’s about managing your purchases well, keeping your inventory low and keeping an iron grip on the finances, he offers.