OTTAWA (27 July 2010) - May was a pretty good month for both furniture and home furnishings stores but electronics and appliance stores lost ground slightly, according to the latest figures from Statistics Canada. In fact, with a combined year-over-year growth rate of 5.6%, furniture and home furnishings were stars at retail for the month.

On an unadjusted basis, furniture store sales were preliminarily pegged at $797 million for May 2010, up from the revised $736 million for the prior month. This was also 3% gain over the $774.2 million sold in May 2009.

Meanwhile, home furnishings stores had May 2010 preliminary sales of $444 million, up from a revised $422 million in April and up 10.5% from the $402 million recorded in May 2009.

Merchants included under the ‘home furnishings' category include floor covering stores as well as retailers specializing in draperies and window treatments, bed linens as well as art and decorative accessories.

In their National Retail Bulletin, the Toronto-based consulting firm J.C. Williams Group, noted that furniture and home furnishings stores has combined sales of $1.24 billion in May, up 5.6% over the $1.18 billion booked for May 2009.

For the year-to-date, furniture and home furnishings stores had unadjusted dales of $5.70 billion to the end of May - up 6.7% over the $5.34 billion for the comparable period of 2009. These merchants are outperforming all other retail segments, with the exception of motor vehicles and building material stores - however, with the lapse of the federal government's renovation tax credit, the latter have seen their monthly sales fall dramatically in recent months.

Statistics Canada preliminarily set sales for electronics and appliance stores at $979 million for the month of May. While up slightly from the revised total of $963 million for April that was down 1.1% over the $990 million rung-up for May 2010.

J.C. Williams added that, year-to-date, electronics and appliances had ales of $4.85 billion at the end of May, down a slight 0.5% from the $4.87 billion for the first five months of 2010.

The consulting firm also noted that the Canadian release of Apple's iPad at the end of May didn't translate into increased sales for these merchants.

According to Statistics Canada, total retail store sales were $38.4 billion for May, up from $36.3 billion the prior month and 3.0% greater that the $37.3 billion recorded for May 2010. Year-to-date, all stores had $158.5 billion, up 6.3% over the January to May period of 2009.

"The good news is that unadjusted retail sales were up on a year-over-year basis for the sixth consecutive month," J.C. Williams noted in their commentary. "On the other hand, the vigorous growth of early 2010 seems to be losing steam."

Williams noted that Canadian consumer confidence index has seesawed every month this year, suggesting that consumers continue to be uneasy with an unclear economic outlook.

In his note to clients, Pascal Gauthier, a senior economist with TD Economics, noted recent drops in homebuilding and existing home sales activity are making gains in housing related expenditure - which typically account for $1 in every $8 spent - harder to come by.

"Moreover, anticipation of less favourable borrowing rates and implementation of HST (where perception trumps reality) in B.C. and Ontario brought a portion of consumer spending forward. A consequent drying up of pent-up demand was in store," he observed, assign that consumer spending outlooks will be hampered by higher debt service costs in the months to come.

"May was not a great month for Canadian retailers," Williams said, "but it may be a harbinger for things to come. The erratic and somewhat schizophrenic nature of today's economic environment will continue to be reflected in both consumer behaviour and retail sales. This is the new normal."