The nation’s retail sales numbers for July were released this morning by Statistics Canada. The results were a little disappointing. Versus June, the percentage change for total retail sales was -0.6%. Versus July of last year, the change was -4.9%. On a three-month moving average basis, they were -4.8% year over year. The biggest reason for the moderation in retail sales from period to period was lower gasoline prices. According to the latest Consumer Price Index report, gasoline prices fell 28.3% year over year in July.

Automotive Sales – Looking Up

There is one sub-category from which to draw encouragement. Auto-sector new, used and parts sales were -7.7% year over year on a three-month “smoothed” basis. While this is significantly negative, it is an improvement from its February trough level of -17.6%. It is interesting that “smoothed” U.S. auto-sector sales are a similar -7.9% year over year. The U.S. market has been particularly aided by the $4,500 “cash for clunkers” program.

The official name of the U.S. program is the Car Allowance Rebate System (CARS for short). CARS has an interesting side-benefit for Canada. The push to have drivers shift to more fuel-efficient vehicles is helping the production lines of Japanese automakers in this country. Some re-assigned and re-tooled operations of the former Big Three are also being pumped up as well. All of the automakers are on the carbon-reduction bandwagon.  

As for motor vehicle sales in Canada, on a unit basis, they rose 5.3% in July compared with June. As a good news story for Canadian production, North American built passenger cars had more sales success than offshore-built cars. It was also nice to hear that Ontario (+10.0% month to month) led the way among the provinces in realizing stronger car sales. National car sales were still -8.5% in July 2009 versus July 2008.

Two Problems with the Data

Two significant problems come to mind with regard to Canada’s retail trade data. First, the information is late. Only now is July data being released, whereas in the U.S. August findings were published a week ago. Second, the coverage of Internet sales is confusing and inconsistent. If a company has a huge warehouse operation, its sales may not appear in the retail trade numbers. They are more likely to be included in wholesale trade.