Canada: May retail sales suffered from social distancing measure – NFB

Data released on Friday showed retail sales in Canada dropped in May 2.1%, the second consecutive slide in a row. According to National Bank of Canada analysts the preliminary numbers for June should help limit annualized losses in Q2. They point out, sales remain above the pre-pandemic level. 

Key Quotes:

“Once again in May, retail sales suffered from social distancing measures imposed to limit the spread of COVID-19. Statistics Canada noted that 5.6% of shops were closed at some time during the month, up from 5% in April. Unsurprisingly, the sectors most dependent on social contacts – notably clothing – suffered some losses in the month.”

“Statistics Canada is flagging a 4.4% rise in retail sales in June, which would limit annualized losses in the second quarter of the year to 3.0%.”

“Looking further ahead, we expect Canadians to shift some of their spending towards services as the economy re-opens more completely. That said, consumer outlays on goods should remain relatively strong considering the savings amassed by households during the crisis.”