- December retails sales were nothing like analysts had expected. In the holiday shopping month par excellence, Canadians actually reined in their spending, sending retail sales down 2.1 per cent from the previous month, well below the consensus forecast of a 0.3 per cent decline.
- Compared to December 2011, sales were down 0.7 per cent, the worst performance since October 2009.
- Weak new auto sales were the biggest drag on the retail sector, dropping 7.7 per cent from November.
- But most stores typically associated with the Christmas shopping frenzy saw meagre activity at the cash register as well. Sales of electronics and appliances, in particular, tumbled 12.1 per cent.
- Regionally, Alberta, Ontario and Quebec recorded the deepest slumps, with sales down about 2.5 per cent in all three provinces from the prior month.
What the analysts think:
- Black Friday cannibalized non-auto December sales, said CIBC’s Emanuella Enenajor. The strongest piece of evidence for that are the dismal sales of electronics, a typical Black Friday purchase.
- A bleak December for merchants bodes ill for Canada’s fourth-quarter GDP (due out next week), noted RBC’s Paul Ferley. Expect a modest 0.5 per cent annualized gain in the last three months of 2012, well below the Bank of Canada’s forecast of one per cent growth.
- Looking at the glass half-full, TD’s Dina Ignjatovic noted that the retail slowdown is likely a sign that consumer spending is falling in line with the Canada’s slower pace of growth.