Rising gasoline prices and sales at new motor vehicle dealers helped push retail sales up 2.2% in May to $62.2 billion, Statistics Canada said Friday.
Lifted by inflation, the increase in sales in May proved to be more significant than that of 1.6% evoked by the preliminary estimate of the federal agency. Its first estimates for the month of June, however, announce a slowdown in the pace of gains in these same sales, with preliminary growth of 0.3%.
TD Bank economist Ksenia Bushmeneva said retail sales grew at a healthy pace in May, but the details of the agency’s report were not as positive as one might think. “Much of May’s gain was due to higher prices, particularly at the pump, and a recovery in auto sales after three months of declines,” Ms.me Bushmeneva in a report.
Digging deeper into the Statistics Canada document, the economist observed that a number of categories—gasoline, clothing and sporting goods, among others—actually saw their sales decline when taking into account the ‘inflation.
The Federal Statistical Agency said core retail sales (which exclude gas stations and motor vehicle and parts dealerships) rose 0.6% in May, while overall retail sales expressed in volume increased by 0.4% during the month.
“With inflation at its highest level in decades, rising prices have given nominal retail sales a boost. As such, it is becoming increasingly important to look at spending in real or inflation-adjusted terms,” said Ms.me Bushmeneva.
Increases in several sectors
Statistics Canada reported that sales increased in 8 of the 11 sub-sectors it tracks.
A 12% rise in gasoline prices helped push gasoline station sales up 9.2% in May, but when expressed in volume terms, they fell 2.2%.
Meanwhile, sales at motor vehicle and parts dealers rose 3.3%, boosted by a 3.8% rise at new vehicle dealers, their best performance since February 2021. motor vehicle parts, tires and accessories rose 5.8% and those of other motor vehicle dealers gained 1.1%, while used car dealers saw their sales fall by 1. .6%.
The rise in core retail sales was led by a 1.9% increase in sales at food and beverage stores, while sales at general merchandise stores rose 1.4%.