Canadian retailers had a strong 2007 with sales increases in all major commodity groupings, Statistics Canada reported today.

Canadians spent $413.4 billion on goods and services in retail stores last year, up 5.8% from 2006.

The year-over-year sales increase in the third quarter was the weakest of the year at 4% while the 7.2% rise in the second quarter was the strongest.

More than half of spending in retail stores focused on transportation, food and beverages. Proportionately, of every $100 spent in retail stores in 2007, consumers spent about $21 on food and beverages, $21 on motor vehicles, parts and services, $10 on automotive fuels, oils and additives, $9 on furniture, home furnishings and electronics, $9 on health and personal care, $8 on clothing, footwear and accessories, $7 on hardware, lawn and garden products, $3 on sporting and leisure goods and $2 on non-electric housewares. The remainder, about $9 was spent on all other goods and services such as tobacco and pet food.

Of all the commodity groups, sales of automotive fuels, oils and additives had the strongest growth in 2007, up 11.3% over 2006 to $41.5 billion. According to the Consumer Price Index (CPI), gasoline prices rose 4.5% over 2006. This was the third time in the last four years that automotive fuels, oils and additives led sales increases among retail commodity groupings.

Sales of motor vehicles, parts and services rose a modest 3.6% in 2007 to $87.4 billion, on the strength of sales of used automotive vehicles (+7.4%). This was the largest annual increase in sales of used automotive vehicles since 2001. According to the used car industry, the rise in sales of used automotive vehicles may have been influenced by a surge of imports of second-hand vehicles from the United States, pushing down prices.

New vehicle sales were the weakest in three years (+1.6%) due to a decline in the value of new passenger car sales.

A more detailed analysis of new motor vehicle sales in 2007 will be published later this April.
Sales growth for many commodities achieved historical highs in 2007

Many other commodity groupings had their strongest growth in recent years in 2007. Health and personal care products registered the second highest annual percentage increase (+8.5%) of all commodity groupings in 2007. Sales of prescription drugs, which represented over one-half of the sales in this category, rose 10.7%. Over-the-counter drugs were up 7.5%, the largest increase in five years.

Sales of furniture, home furnishings and electronics continued to be strong, rising 7.3% in 2007 to $38.6 billion. Within this category, sales of home furnishings jumped 11.5%, the strongest increase since the start of the survey in 1998. Sales of home electronics such as televisions, cameras, telephones, computer hardware and software rose a more modest 6.2%.

Sales of sporting and leisure goods rose by 6.1%, a record since the series began. This was powered mainly by a 21.6% increase in sales of toys, games and hobby supplies (which include electronic games and game systems). In contrast, sales of pre-recorded CDs, DVDs, video and audio tapes declined by 1.8%, the weakest performance since the beginning of the series.

Retailers sold $28.8 billion of hardware, lawn and garden products in 2007 for a 5.7% increase, the lowest annual growth since 2000. Sales of lumber and other building products were up 8.4%, the lowest annual increase since 2001.

In 2007, sales of food and beverages amounted to $88.6 billion, up 5.1% over 2006. Food sales (the majority of sales within this grouping) advanced 4.7%. The CPI for food purchased from stores showed a 2.7% increase during the same period.

Clothing, footwear and accessories registered sales of $33.8 billion, up 4.0% over 2006. Sales for women’s and children’s clothing rose around 4% while sales of men’s clothing advanced 3.4%. Prices were down for all clothing categories in 2007 according to the CPI. Footwear sales, meanwhile, were up 4.6%.