OTTAWA - Canadian retail sales rose in February for the second month in a row but flat sales volumes suggest shoppers were spending more, not buying more.
Retail sales for February totalled $39.5 billion, pushed 0.8 per cent higher than January, with gains in seven of 11 subsectors, representing 82 per cent of total retail trade, Statistics Canada reported Tuesday.
However after removing the effects of price changes, particularly higher gasoline prices, retail sales were flat in volume terms.
CIBC economist Emanuella Enenajor said gain in retail spending was more than economists had been expecting but shoppers didn't actually consume more.
"Canadian consumers had to run a bit faster in February just to stay in the same place," Enenajor said.
"Cooler prices at the pump in upcoming retail reports could spell some relief for households, but for the month of February, retailing could provide no lift to GDP."
The largest advance in dollar terms among all subsectors was a 2.8 per cent rise at general merchandise stores, although department store sales advanced only 0.8 per cent while "other" general merchandise stores rose 4.4 per cent.
After three straight monthly declines, sales at gasoline stations also increased 1.9 per cent as a result of higher prices at the pump.
Sales at motor vehicle and parts dealers rose 1.0 per cent in February, the second consecutive monthly increase.
Capital Economics economist David Madani said the pause suggested a more cautious consumer.
"The underlying trend in retail sales volumes over the past several months has been fairly weak, with sales almost levelling off," Madani wrote in a report to clients.
"This softening is consistent with the sharp slowdown in consumer credit growth. That said, we suspect that the recent softness in retail sales partially reflects increased household spending abroad, as shoppers continued to take advantage of the strong Canadian dollar and lower US retail ticket prices."
Retail sales were higher in eight provinces in February.