Canadian consumers in a spending mood amid rising prices

Statistics Canada data released on Tuesday indicates Canadian consumers are in the spending mood these days.

Retail sales increased 1.4 per cent to $62.0 billion in October, posting its largest increase in five months. Sales were up in six out of 11 subsectors, representing 84.4 per cent of retail trade. The increase was led by higher sales at gasoline stations (+6.8 per cent) and food and beverage stores (+2.2 per cent), said the federal agency.

Also, sales in the food services and drinking places subsector increased 1.5 per cent to $7.4 billion in October as Canadians continued to feed pent-up demand for dining out. Higher sales were reported in limited-service restaurants (+1.6 per cent), full-service restaurants (+1.3 per cent), special food services (+2.7 per cent) and drinking places (+0.6 per cent), reported StatsCan.

“Leading the increase in retail sales in October were higher sales at gasoline stations (+6.8 per cent), which recorded their first gain in four months. In volume terms, sales at gasoline stations decreased 3.3 per cent. Gasoline prices increased 9.2 per cent on an unadjusted basis in October after the announcement of future oil production cuts by the Organization of the Petroleum Exporting Countries Plus and a weaker Canadian dollar,” said Statistics Canada.

“Posting its second increase in five months, core retail sales rose 0.9 per cent in October, led by higher sales at food and beverage stores (+2.2 per cent). Increases were observed in three out of four store types in this subsector, led by higher sales at supermarkets and other grocery (except convenience) stores (+2.5 per cent). The Consumer Price Index (CPI) noted that prices of food purchased from stores rose 10.1 per cent on a year-over-year basis and continued to outpace the all-items CPI growth for an 11th consecutive month.

Statistics Canada report that sales in the food services and drinking places sector for October (+18.1 per cent) were higher than they were for October 2021, when the fourth wave of COVID-19 in Canada had repercussions on the subsector. Sales were up in each of the industry groups, with full-service restaurants (+20.5 per cent) and limited-service eating places (+11.2 per cent) having the largest increases in dollar terms, and special food services (+52.3 per cent) and drinking places (+20.7 per cent) having the largest percentage increases.

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)