December cruelest month for shopping in Canada
If you didn’t know any better, you’d think it suddenly got too cold for Canadians to go shopping.
For five consecutive Decembers, retail sales have dropped on a monthly basis, both in terms of nominal dollar figures and volume. In December 2016, nominal sales fell 0.5 per cent monthover- month on a seasonally adjusted basis, their worst showing since March.
Some of the areas of weakness included electronic and appliance stores, clothing stores, jewelry, luggage and leather goods stores, hobby, book, toys, games and music stores — essentially, a laundry list of locations you’d hit to find things to put under the tree on Christmas Eve.
“Shopping tied to the holiday season was also anemic, a trend we’ve seen in recent years as marketing campaigns aim to pull forward spending earlier in the year,” CIBC Capital Markets economist Nick Exarhos wrote in a report.
The non- seasonally adj usted f i gures, however, showed an increase of 8.1 per cent for the month. While still well in positive territory, this advance is a far cry from the average monthly jump of 19.5 per cent seen in Decembers from 1991 through 2000.
The relative year- end weakness raises the prospect that a trend toward com- pleting holiday shopping in advance of December has skewed the seasonally adjusted year-end readings.
“It’s had an impact, though it’s difficult to say exactly what the impact is,” said BMO Capital Markets senior economist Benjamin Reitzes. “We’ve been seeing strong Novembers and less strong Decembers, which suggest that Canadians have been pulling purchases forward.”
Statistics Canada does attempt to adjust for shifting sales patterns in certain sub-sectors related to promotional events such as Black Friday and Cyber Monday. Yet the dismal Decembers have continued — and in this instance, the areas singled out as having ended 2016 on a poor note are also the ones highlighted by the national statistics agency as most susceptible to having sales move from December to November.
Thus, either a series of one-off events like the polar vortex or coincidental cyclical softness have since unduly dampened December sales, or that the impact of shifting sales patterns is not yet fully captured in the seasonal-adjustment process.