Retail sales dropped 1.8 per cent in December as the busy holiday shopping season was battered by severe winter weather, Statistics Canada said Friday.The decline was the biggest in a year and was felt across all provinces, the federal agency said.Overall, retail sales totalled $40.2 billion for the month as nine of the 11 subsectors reported lower results.Most retail stores, which generally see higher traffic during the Christmas shopping period, reported an overall decline in sales for December amid the frigid and stormy weather, the agency said.
A massive ice storm hit southern Ontario in the days leading up to Christmas, while the eastern provinces suffered their own unseasonably bad weather and power outages.
The biggest drop in dollar terms was the motor vehicle and parts subgroup, which slid 3.2 per cent as sales at new car dealers fell 3.6 per cent for the month.Excluding auto sales, retail sales were down 1.4 per cent.
Retail sales were down in all the provinces, with Ontario posting a 2.2 per cent decline. Sales in British Columbia were down 2.1 per cent, while Quebec slipped 1.2 per cent. Sales in Nova Scotia were down 3.5 per cent, the biggest drop among the Atlantic provinces.
BMO Capital Markets analyst said the sharp decline across every province suggested there were other reasons for the weakness besides weather.
"Another factor could be that more aggressive Black Friday sales pulled some activity into November," he wrote in a note.
"This all but assures that the impressive five-month run for the Canadian economy through November came to a screeching halt in the final month of 2013."
Electronics and appliances stores saw a drop of 13.1 per cent in December compared with gains of 3.5 per cent and 6.8 per cent in October and November, respectively.
Sales at sporting goods, hobby, book and music stores were down 4.0 per cent, while sales at clothing and accessories stores dropped 2.2 per cent. Furniture and home furnishing stores saw a 7.8 per cent decline.
Since January, the financial results of several retailers have foreshadowed lacklustre retail sales figures.
Women's apparel retailer Reitmans (Canada) Ltd. (TSX:RET.A) said holiday sales fell 5.3 per cent for the five weeks ended Jan. 4, while the U.S. parent company of department store retailer Sears Canada Inc. (TSX:SCC) said its Canadian sales were down 4.4 per cent.
Target Corp. warned that poor sales at its Canadian stores caused it to slash prices. The U.S. retailer now anticipates a deeper loss of about 45 cents US per share for the quarter, more than the loss of 22 cents to 32 cents US it had previously projected.
Both Sears Canada and Target Corp. report their quarterly financial results on Wednesday.
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