Retail sales in Canada fall in December as COVID cuts bite Reuters

Author: David Ljunggren

OTTAWA (Reuters) – Retail sales in Canada were likely to fall 2.1% in December as authorities imposed restrictions on the Omicron variant of coronavirus and challenged retailers, Statistics Canada announced on Friday.

Statscan also reported that retail sales rose 0.7% in November, which was lower than the 1.2% profit forecast by analysts.

The December flash estimate is based on the responses of 50.6% of the companies surveyed. The average response rate is 90.0%.

Statscan also said some buyers decided to bring their purchases forward to November to avoid shortages caused by endemic supply chain problems.

Andrew Grantham, senior economist at CIBC Capital Markets, said the fall in December was slightly higher than expected.

“Brick retailers will likely continue to struggle in January due to Omicron-related restrictions and staff shortages,” it said in a statement.

This weakness, he suggested, could “tip the balance slightly” to keep the Bank of Canada firm when it announces the rate on January 26th. Money markets see a 70% chance that the central bank will lift its key. night rate is the current record of 0.25%. {BOCwatch]

The bank had previously said it could raise rates in April.

Stephen Brown, Canada’s senior economist at Capital Economics, said the December decline in sales was likely to be more than 2.1%, given the rapid expansion of Omicron that month.

November’s profit was driven by large sales at gas stations and sales of building materials and gardening equipment and supplies.

Sales rose in six of the 11 sub-sectors, accounting for 63.8% of retail trade. In terms of volume, retail sales rose by 0.2%.

The Canadian dollar was trading 0.1% lower at 1.2520 with the green card, or 79.87 cents in the US.