Auto Service World
News   April 25, 2001   by Auto Service World

StatsCan Puts Auto Parts Retailers Growth Near Top

Auto parts retailers were one of the bright lights in Statistics Canada’s February 2001 retail sales statistics.
In the report sales by retailers of automotive parts, accessories and services advanced 2.4%, while higher prices for gasoline at the pump pushed sales up by 0.8% in gasoline service stations.
Overall, retail sales fell 0.3% in February to $23.6 billion after advancing 0.5% in January and 1.0% in December. Prior to December, retailers experienced a four-month period of essentially flat sales that followed important gains in May, June and July.
In constant dollars, retail sales declined 0.5% in February compared with January. The only significant price increases were confined to food and clothing.
In February, consumers spent less in the automotive sector (-1.8%), in the furniture sector (-1.5%) and in the clothing sector (-0.7%). Spending remained unchanged in general merchandise stores and increased only marginally in stores classified as other retail (+0.2%). The other retail category includes stores such as liquor, sporting goods, hardware and book stores.
Food stores (+2.4%) and drug stores (+0.6%) posted the only significant monthly increases in February.

Sales setback for most retailers
Lower sales by motor and recreational vehicle dealers (-3.5%) led to the 1.8% decline for the automotive sector in February. With this decline, motor and recreational vehicle dealers lost most of the sales gains reported in the previous three months. Sales by these dealers have weakened considerably since last summer, down 4.9% from the last peak reached in August 2000. Large cash rebates and attractive financing offers helped to stimulate sales of motor vehicles in most of the spring and summer 2000.
After enjoying a robust January, retailers in the furniture sector posted a 1.5% decrease in February, their largest sales decline in more than a year. Sales in the furniture sector have been strong in the last four years, with annual gains ranging from 8.0% to 11.0%.
Weak consumer spending in all types of clothing stores in February led to a 0.7% sales decline in the clothing sector. Retail sales in this sector remained essentially unchanged since the fall of 2000 after advancing rapidly in the previous 12 months.
In February, retailers in the general merchandise sector posted no change in sales after two months of strong increases. Within this sector, the decline in department store sales (-1.1%) was offset by an increase in sales by other general merchandise stores (+1.4%). The rapid sales growth observed since early 1997 in other general merchandise stores has slowed since the summer of 2000. In contrast, department stores showed two slowdowns – in the spring of 1998 and in the second half of 1999. These slowdowns were mostly associated with restructuring in department stores.
As in December 2000, higher prices of fresh products explained a large part of February’s sales increase in food stores (+2.4%). Food stores had posted a 2.8% decline in January when food prices remained essentially unchanged compared with the previous month. In 2000, retailers in the food sector experienced their strongest annual increase in sales since 1997.

Lower sales in all provinces except British Columbia
In February, retail sales declined in all provinces except in British Columbia (+1.5%). However, this sales increase in British Columbia followed a 1.1% decline in January, when most of the other provinces experienced strong sales. Retailers in British Columbia have generally been reporting strong sales gains since the fall of 1998 after a year of declines. British Columbia and Alberta continue to report strong sales gains, while other provinces have been affected by sales slowdowns during the second half of 2000.

Related indicators for March 2001
Total employment increased 0.2% in March following a decline of similar size in February and no change in January. Housing starts were down (-1.5%), while the number of new motor vehicles sold in March increased from February according to preliminary figures from the automotive industry.

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