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Big ticket stores see gains in June PDF Print E-mail
Written by HGO Staff   

OTTAWA (29 August 2011) - Sales for all three categories of big ticket home stores were up in June over the prior month, however, only electronics and appliance stores are ahead of the pace set in 2010, according to the latest figures published by Statistics Canada. Both furniture and home furnishings stores lost ground in the first half of the year.

The agency tagged furniture store sales for the month of June at a preliminary $801.4 million, up 3.4% from the revised $782.9 million sold in May. But it's down 3.4% from the $830.2 million rung-up in June 2010.

Furniture store sales for the year-to-date were $4.42 billion, down 2.9% for the January to June period of last year.

Meanwhile, home furnishings stores - which sell everything from floor covering to wall and window treatments, lamps, lighting and decorative accessories - had preliminary sales of $471.6 million in June, up 5.3% from the prior month's revised $448.1 million but a 4.9% decline from the $496 million rung-up in June 2010.

For the year-to-date, home furnishings stores had sales of $2.52 billion, down 2% from the comparable period last year.

Sales by electronics and appliance stores were preliminarily set at $1.07 billion for June, up 1.7% over the prior month's revised $1.05 billion but a drop of 3.4% from the $1.11 billion sold in June 2010.

These merchant's had a year-to-date tally of $6.11 billion, a gain of 1.3% over the first half of 2010.

In the latest issue of its National Retail Bulletin, the Toronto-based consulting firm J.C. Williams Group pointed out that, collectively, furniture, home furnishings and electronics and appliance stores saw their combined sales sink 3.7% in June.

"The category is not performing as well as during the peak of the boom in 2007-2008, but it is performing better than in 2006," the bulletin opined. "In addition, the downturn in late 2008-2009 caused a higher than expected boost for 2010 sales due to pent-up demand. Given the good 2010 results, the category is up against harder comparables for its 2011 sales."

Big ticket home stores continue to lag behind other retail sectors.

All store retail sales jumped 4.2% in June to $40.6 billion, driven mainly by the automotive sector. Motor vehicle sales were 5.4% for the month while gas stations gained 21%.

However, excluding automotive, store-based retail sales were only 1% for the month of June - to $25.6 billion - even though for the year-to-date sales dropped a slight 0.1% to $137.8 billion.

However, at least one analyst urged his readers not to read too much into the strong automotive numbers. "The auto sector drove sales in June due to significant discounting," BMO Financial Group senior economist Benjamin Reitzes said in a note to clients. "Clearly, that's not a sustainable trend, but underlying sales climbed for a second straight month, suggesting Canadian households haven't thrown in the towel yet. Still, expect cautious spending to continue amid the negative global economic news and elevated household debt levels."

Other observers were taking similar positions.

"Going forward, we expect soft retail spending to be a key theme for the Canadian economy," Diana Petramala, an economist with TD Economics, said, adding she expects the gains made by the auto sector in June will probably be lost in July and August. "Moreover market turmoil in August likely weighted heavily on consumer attitudes and balance sheets.

"Once the global recovery gets back on track in early 2012, and confidence improves, households are likely to continue to enjoy a low interest rate environment," she continued, noting the Bank of Canada probably won't raise interest rates until mid-2012 at the earliest. "However, elevated debt levels suggest that interest rates will not be the same catalyst of growth they were over 2010."

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