May 23, 2008

Retail sales weak in MarchBy Dana FlavelleTheStar.com

Canadians bought more cars but fewer clothes and accessories amid severe winter weather as retail sales grew a weaker-than-expected 0.1 per cent in March, Statistics Canada said yesterday.

Analysts were forecasting a 0.3 per cent rise in March sales over the previous month.

Statistics Canada blamed severe snowstorms, particularly in Quebec, for a 2.6 per cent slide in clothing and accessories sales nationally.

The decrease was offset by a 0.4 per cent rise in automotive sales, the fifth increase in six months, as consumers bought more new vehicles, preferring passenger vehicles over trucks, the federal agency said.

Steep price cuts and a percentage point decline in the GST since the start of the year have helped boost automotive sales.

For economists looking for clues on how the consumer is responding to higher gas prices and the lingering threat of a U.S. recession, the report offered few new insights.

“There is a lot of weather-related `noise’ in the retail data that is hampering the picture,” Stewart Hall, an economist with HSBC, wrote in a note to clients. Still, with Canadians continuing to enjoy relatively strong job growth, housing prices and easy credit, “there is little reason to believe that the Canadian consumer is hunkering down.”

In Toronto’s downtown Eaton Centre yesterday, there were few signs of retail distress. The mall was busy over the lunch hour and only a few stores had discreet signs in their windows advertising modest sales on selected items.

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