Canada: retail sales rebounded in February, prior to the recent restrictions - TD Bank Financial Group

According to ActionForex, analysts at TD Bank Financial Group note that Canada's retail sales rebounded in February amid easing containment measures.

"After a weak January, retail sales rebounded 4.8% m/m in February, helped by the easing of restrictions in Ontario and Quebec. The headline was slightly better than Statistics Canada’s preliminary forecast, which called for a 4.0% gain. "

"Gasoline sales were a source of significant strength in the report (+12.3%) on the back of higher gas prices. Gasoline sales were also higher in volumes terms (+6.8%) with gas stations benefiting from improved mobility trends. Vehicle and parts sales also shifted into higher gear, rising by 5.0%."

"Core sales, which exclude the two categories mentioned above, also rose in February (+3.8%). Gains were broad-based, with most categories faring better on the month."

"Food & beverage (-1.4%) and health & personal care (-0.8%) stores were the only categories where sales declined in February, however, both remain higher than what they were a year-ago."

"Retail sales rebounded in February, and likely in March, amid easing containment measures which took place during that time. However, progress remains highly dependent on the path of the virus, which has since taken a turn for the worse as a vicious third wave led to higher caseloads and hospitalizations. Recent spending and mobility data suggests that retail sales are likely to weaken once again in April amid renewed restrictions and stay-at-home orders."

"The third wave of the virus means that Canadian shoppers and retailers will need to wait a bit longer before spending picks up again. Acceleration in the vaccination campaign in recent weeks and modest reduction in new cases offers optimism that better days are not too far ahead."