Canadian Business Wire

In its annual report on the retail industry and consumer spending in Quebec and Canada, the Conseil québécois du commerce de détail -Retail Council of Quebec, found that retails sales grew in 2006, and that is expected to continue in the rest of 2007.

In 2006 retail sales for both Quebec and the rest of Canada showed overall growth. In Quebec, retail sales increased by nearly 4% (3.7%) while reaching $86.3 billion overall. For the rest of Canada, sales increased by almost 5% (4.6%), to a total $384.8 billion. Together this was the eleventh consecutive year that retail sales increased in Canada.

It was positive factors such as low interest rates, stable inflation and decent job creation levels that kept consumers' confidence level high throughout the year. However as compared to 2005, growth was slightly down.

The sectors benefiting the most in Quebec from above-average growth included pharmacies (15.3%), hardware stores (8.3%), service stations (6.6%) and furniture stores (6.3%).

The news wasn't all good however, as some industry sectors experienced negative growth in 2006. These sectors included shoe stores, and computer and software related stores. This negative growth according to the report was due mainly with the deflation of the prices of goods.

"The retail sector saw a solid increase in sales, both in Quebec and in Canada, although the growth of sales in Quebec was significantly lower in 2006 than the previous year," concluded Mr. Gaston Lafleur, President of the CQCD.

One reason for the continued growth in Quebec, was that there households saw their personal disposable income grow from $22,454 in 2005 to $23,388 in 2006. While the disposable incomes of the average Canadian was $25,540 in 2006.

The Economic Outlook for 2007 in Retail Trade

The Canadian and Quebec economies will continue to grow in 2007. "The factors influencing consumer spending in Quebec in 2007 are pointing in the right direction," observes Mr. Lafleur.

Consumers should expect to see an overall increase in their personal disposable income. With that, job creation is also expected to grow but at a slower rate. Meanwhile a slight decline in the unemployment rate is unfortunately anticipated, with inflation remaining stable over the same period.

The report also found that for 2007 interest rates could fall, as the Bank of Canada will want to remain in line with its policy on the inflation-control target range of 1 to 3%.

Mr. Lafleur adds, "The current economic situation remains positive and consumer spending should allow retail sales to grow in Quebec during 2007. While the CQCD does not expect this growth to be as strong as last year, it should be in the order of 3.5% in 2007."