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Retail sales slump in autumn

Retail sales slump in autumn

Posted on: 12/21/2018 | Author: ATB Financial's Economics + Research Team

After hitting a record high in the spring of this year, shoppers in Alberta appear to be losing some of their enthusiasm for spending. Through the summer and into the fall of 2018, retail sales slumped, falling for five months in a row.

In October, retail spending totalled $6.7 billion, down almost 2 per cent from the same month last year. (The figure is adjusted to take into account predictable trends in seasonality, but not adjusted for the effects of price inflation.) However, total sales are still up by 2.5 per cent in the last 12 months compared to the previous twelve month period.

Some of the decline is likely due to the downturn in oil prices, especially the Western Canadian select blend benchmark and the resulting differential between it and the U.S. benchmark price. Prices had been decent through the summer, but the differential started to rise through September and October.

Most Albertans, be they employed in the oil sector or not, understand the indirect impact this has on the province’s economy. It seems to be eroding their consumer confidence.

With the economy softening into the final three months of the year, retail activity has probably picked up little momentum going into the crucial Christmas shopping season. On top of all of this, on-line sales are growing, which is pinching some Alberta retailers even harder.

NOTE TO READERS OF THE OWL: The Owl is taking a well-deserved rest for the holiday season, but it will be back better than ever on January 7, 2019.

Retail sales in Alberta, graph

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