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Big ticket store sales fall in April PDF Print E-mail
Written by Michael J. Knell   

OTTAWA (28 Junes 2012) - April wasn't a good month for big ticket home stores as sales continued to trend negatively, losing much of the ground they gained during the prior month, according to the latest figures published by Statistics Canada.

The federal bean counter set furniture store sales at a preliminary mark of $720.0 in April, a 4.8% decline from the revised tally of $756.0 million in March. It's also 5.5% off the $761.9 million sold in April 2011.

For the year-to-date ending April 30, furniture store sales were $2.86 billion, a marginal gain of 0.9% over the $2.83 billion sold in the first four months of last year. The year-to-date gain was attributed solely to the 14.3% jump in March as sales in every other month of 2012 were down on a year-over-year basis.

Home furnishings stores - which sell everything from floor covering to wall and window treatments, lamps, lighting and decorative accessories - had preliminary sales of $427.2 million in April. That's 2.8% off the revised $439.7 million sold in March and 2.5% off the $438.0 million rung-up in April 2012.

Year-to-date sales for these merchants tallied $1.66 million at the end of April, up 3.1% over the comparable period of last year.

These stores have also a tough row-to-hoe in 2012, as only in March did sales show any improvement on a month-over-month basis.

This hasn't been a kind year for electronics and appliance stores across the country. April sales were preliminary tagged at $980.5 million, a sharp drop of 12.6% over the revised figure of $1.12 billion in March. It's also a steep 8.5% decline from the $1.07 billion sold in April 2011.

Year-to-date sales are $4.11 billion, down 3.1% over the first four months of 2011. These merchants have been generating negative sales growth each month to date in 2012 as well as for eight of the past 12 months.  Observers are attributing the fall in sales to a number of factoring, including deflation (particularly in a number of product categories such as televisions, cell phones and game devises) as well as a discernible lack of sexy high-tech gadgets such as the iPad.

During April, big ticket stores continued to lag behind their retail colleagues and competitors.

Total store-based retail sales were down 0.6% in April to $37.8 billion. However, when automotive dealers and gas stations are taken out of the equation, local-based retail saw sales fall 2.6% to $23.4 billion. Automotive dealers saw their sales climb 3% while moderate increases in pump prices translated into a 2.5% gain for gas station operators.

Building material suppliers and garden centres were the leaders in retail in April as their sales climbed 3.9% on a year-over-year basis.

For year-to-date, all retail has seen sales gain 3.8% to $140.2 billion. Take out automotive and the gain shrinks to 2% and $89.1 billion.

Auto dealers saw their sales climb 8.6% to the end of April while gas stations were up 4.8%.

Leading analysts don't appear to be all that enthusiastic about retail's prospects in the coming months.

"The April result points to very moderate consumer spending growth in the second quarter, especially in volume terms. Consumer spending has been progressing at about half its historical pace over the last two-three years, and this month's result is no indication that things will pick up anytime soon," Jacques Marcil, a senior economist with TD Financial Group, said in a statement.

He pointed out that Canadian household debt continues to be the leading domestic risk to this country's economic performance. "While it's not showing any sign of edging down based on data released last week, it's not likely to rise abruptly either based on today's sluggish retail sales reading," he said. Since furniture and appliance sales are often credit-driven, this could have implications for retailers in this category.

Marcil is also concerned about Finance Minister Jim Flaherty's new and tighter mortgage rules which will take effect in July. "In the near term, this new development may indirectly curb home-related retail sales for big-ticket items such as appliances and furniture," he wrote in his note to clients.

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