Canadian National Retail Report:  September

Retail sales in September fared slightly better than the month of August with some late back-to-school shopping; All Stores sales increased by 3.5%.  Consumer confidence appears to be levelling off as confidence rose slightly to 79.7.  Consumer confidence has averaged 80 points over the past five months.  While the outlook is not bright, it remains sunny for many retail categories.

Clothing and Accessories Stores performed particularly well; the category saw a sales increase of 8.1% in September, beating both its 2009 and 2008 sales volume.

General Merchandise Stores enjoyed a sales increase of 6.7%, outpacing its year-to-date growth of 5.0%.  Canadian Tire reported a 1.4% increase in same-store sales for their third quarter.  

Food and Beverage stores almost doubled their year-to-date (2.4%) expansion, growing sales by 4.3%.  Convenience Stores however, did not fare as well as sales declined by -4.2% in September.

A few categories saw modest to flat sales growth this month.  

Sporting Goods, Hobby, Music, and Book Stores sales gained 1.3% in September, on par with its average annual growth rate.

Health and Personal Care Stores remained flat (0.0%) this month, however the category has benefited from a modest 2.5% increase, year-to-date.  Meanwhile, Shoppers Drug Mart reported same-store sales growth for the third quarter of 1.2%.

Furniture and Home Furnishings Stores took a hit in September, with sales declining by -0.6%.  The category's big-ticket counterpart, Electronics and Appliance Stores performed significantly better with a sales increase of 2.7% in September.

Retail sectors that saw a larger drop in sales this month include Building Material and Garden Equipment Stores (-5.0%) and Miscellaneous Store Retailers (-7.5%).

On the regional front, British Columbia continued to lead the provinces in terms of sales growth; retail sales year-to-date have increased by 6.1%, compared to an average 5.0% in Alberta and Ontario.

As consumers gear up for holiday shopping, retailers have ramped up early discounts and promotions.  Nevertheless, with unemployment decreasing at a painfully slow pace, consumers will continue to be wary of their budgets.

If the weather remains cool and consumer sentiment continues to rise, sales increases of 2%-3% may be expected.