Retail sales grew for 4th straight month in August but September looks flat

Canadian retailers logged $53.2 billion in sales in August, the fourth month in a row that sales have increased since cratering in April because of COVID-19.

But preliminary numbers for September show that sales flattened during that month, a discouraging sign that the recovery may be running out of steam.

Statistics Canada reported Wednesday that overall, sales grew by $192 million, or0.4per cent, from July's level.

The increase was driven by higher sales at building material and garden equipment stores, along withfood and beverage stores.

On the downside, sales at clothing stores were unchangedand sales atsporting goods, hobby, book and music stores fell, as did home furnishings.

WATCH: Diane Brisebois

Online sales continue to be much stronger than what they were before the pandemic, but they, too, are losing momentum as brick-and-mortar stores reopen.

E-commerce sales clocked in at $2.8 billion in August, slightly down from July's level but still up by more than 60 per cent compared to a year ago.

All in all, August's data means that retail sales are3.5 per cent higher than where they were a year ago,and 1.8 per cent higher than where they were in February, before COVID-19 began in Canada.

Diane Brisebois, president of the Retail Council, says that the trend in retail since COVID began is that things for use around the home, such as office equipment, outdoor furniture, are selling well, whereas most other things are not.

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Retail sale numbers reflect Canadians' lifestyles during COVID-19 pandemic, with strong sales of products for the home, and weak sales of soft goods such as fashion items, says Retail Council of Canada CEO Diane J. Brisebois.

But there are wide variances across the country. Seven provinces are seeing higher retail sales than they were before COVID. But in three Ontario, Alberta and Prince Edward Island retailers still haven't fully recovered.

"Retail sales growth continued to slow in August, with a flat performance expected in September," TD Bank economist Ksenia Bushmeneva said. "As sales are well-above their year-ago level in most categories of spending, this moderation is to be expected as the economy enters a slower recuperation phase [but]Rising COVID cases and renewed restrictions on some activities may also weigh on sales in the coming months."