OTTAWA - Canadian retailers rang up sales of $33.7 billion in February, up 0.2 per cent from January and reversing steep declines in November and December -- but still down 5.1 per cent from February of last year.
Statistics Canada said Thursday that February's slight increase was driven by higher prices, as sales in volume terms declined 0.3 per cent month-to-month.
"Canadians are slowly emerging from the deep freeze in spending," commented CIBC World Markets economist Krishen Rangasamy.
"Admittedly, the 0.2 per cent sales gain in February was driven entirely by prices (which by itself is a positive, given overblown concerns about deflation) but the drop in volumes wasn't as bad compared to what we got used to in the fourth quarter."
On a year-over-year basis, the decline was powered by an 18.4 per cent drop in automotive and gasoline sales to $12.6 billion in February.
Meanwhile, the food and beverage segment showed a 6.8 per cent increase over a year ago -- Statistics Canada reported last week that food inflation is running at 7.9 per cent.
And spending at beer, wine and liquor stores was up 5.4 per cent from a year earlier.
Furniture and electronics store sales were down 8.1 per cent year-over-year and showed the largest month-to-month decline, fading 1.9 per cent compared with January. Sales in this sector have fallen every month since July.
Excluding the vehicle sector, sales were up 0.6 per cent month-over-month -- "a pleasant surprise," Rangasamy noted, as this was about double the consensus expectation of economists.
Douglas Porter of BMO Capital markets cautioned: "While a bit better on the surface, the February retail result does not detract from the bigger picture that Canadians reined spending in sharply around the turn of the year."
"The good news," Porter added, "is that more up-to-date data -- such as home and auto sales -- point to less-weak activity since that point."
Still, Porter said, retail sales "are on track to drop at almost a six per cent annual rate in the first quarter, which is not much better than the honking 7.2 per cent drop in the fourth quarter."
