Retail sales slowdown shows rate hikes ‘seem to be working’: economist

Click to play video: 'Retailers facing numerous challenges, experts say'
Retailers facing numerous challenges, experts say
Some experts say retail has always been a tough business, as the sector continues to face the perfect storm of challenges — including high interest rates and supply shortages. Global’s Craig Momney reports – Aug 25, 2023

Statistics Canada says retail sales fell 0.1 per cent to $66.1 billion in August as sales at new and used car dealers fell for the month.

The agency also says its early estimates suggest retail sales were unchanged in September, though it cautioned the reading would be revised.

For August, sales at motor vehicle and parts dealers fell 0.9 per cent as sales at new car dealers dropped 1.1 per cent and used car dealers declined 0.5 per cent.

Click to play video: 'Canadian retailers struggle to stop shoplifting'
Canadian retailers struggle to stop shoplifting

Statistics Canada says core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers – fell 0.3 per cent in August.

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Sales at food and beverage retailers fell 1.2 per cent, while sales at sporting goods, hobby, musical instrument, book and miscellaneous retailers dropped 1.1 per cent.

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In volume terms, overall retail sales fell 0.7 per cent in August.

“The fact that retail sales finally seem to have lost some of their recent resilience suggests we could soon see broader economic weakness,” Desjardins economist Maëlle Boulais-Préseault said in a note Friday.

“The data released today reinforce our call that the Bank of Canada’s is likely to hold rates steady next week, as past rate hikes seem to be working.”

With files from Global News 

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