Total retail sales rose to an estimated $32.7 billion in November from $32.6 billion in October. Preceding November, sales declined two months in a row, almost offsetting strong gains made in July and August, resulting in a relatively flat sales trend. Prior to this period, retail sales have been generally rising at a rapid clip since 2004.

The story was mixed in November with half the retail sectors registering declines while the other half experienced sales increases.

Sales growth in the automotive (+1.8%), building and outdoor home supplies stores (+1.0%), pharmacies and personal care stores (+0.6%) and furniture, home furnishings and electronics stores (+0.4%) sectors helped offset declines in clothing and accessories stores (-2.7%), miscellaneous retailers (-2.4%), general merchandise stores (-1.5%) sectors as well as a slight decline in the food and beverage stores sector (-0.3%).

Once price changes were taken into account, total retail sales fell by 0.2% in November after a 0.6% decrease in October.

Automotive sector sales bounce back

Gasoline station sales grew by 4.5% in November, after three months of consecutive sales declines, partially due to plummeting gasoline prices. Price shifts have strongly influenced sales at gasoline stations in 2006, resulting in a 10.2% sales increase in the second quarter followed by a 3.9% drop in the third quarter.

Sales at used and recreational motor vehicles and parts dealers rose by 1.0% following three months of declines. Sales among these dealers had been strong at the start of 2006 thanks to increased demand for recreational vehicles. Though tempered in recent months, sales were still at historically high levels.

After reaching a record level in August 2006, sales at new car dealers fell for two consecutive months but have started to slowly regain strength with November's increase of 0.6%. Preliminary figures from the automotive industry indicate that sales continued to rebound in December as the number of new vehicles sold is estimated to have increased by approximately 5% in the month.

Within the building and outdoor home supplies stores sector, sales at home centres and hardware stores rose by 1.2% in November, after two consecutive months of decline. Sales by these stores have been posting double digit annual increases since 2002.

Home furnishing stores sales advanced 2.7% after dropping 1.4% in October. After strong gains in late 2005 and early 2006, sales at home furnishing stores have been fluctuating, resulting in a relatively flat trend line.

Pharmacies and personal care stores saw sales increase by 0.6% in November. Sales at these stores have been rising strongly in 2006 with only one monthly sales decline so far in the year.

Partially offsetting these increases were lower sales by clothing stores (-2.7%), shoe, clothing accessories and jewellery stores (-2.7%), sporting goods, hobby, music and book stores (-3.9%) and general merchandise stores (-1.5%), which includes department stores and other general merchandise stores. November marked the second consecutive decline by these store types and followed September 2006's spending spree on clothing. The latest declines have more than offset any of the gains made in September. Warmer than usual weather may have played a part in these declines, as demand for more expensive winter clothing and gear may have been attenuated by warmer temperatures.

Sales in beer, wine and liquor stores declined by 1.4% in November after three straight monthly increases. Supermarkets also registered a sales decline in November (-0.2%). Sales among supermarkets have slowed since the fall of 2005.

Sales pick up in most provinces and territories

After two months of decline, retail spending in Quebec (+0.3%) and Ontario (+0.7%) picked up in November, mainly due to gasoline station sales. Retailers in Manitoba (+1.7%) also saw their sales pick up after declining by 2.0% in October. Retailing in Manitoba has been fairly strong so far in 2006 with only two monthly declines.

Sales were also strong in November in each of the Atlantic provinces. Increases occurred in Prince Edward Island (+2.3%), New Brunswick (+2.2%), Newfoundland and Labrador (+2.0%) and Nova Scotia (+0.9%).

Retailers in Alberta and British Columbia registered sales declines for the third month in a row in November. Still, retail sales in Alberta have seen double digit year-over-year increases every month since April 2005. For British Columbia, severe storms at the end of November are thought to have played a role in dampening sales.

Related indicators for December

Employment increased by an estimated 62,000 in December, pushing the unemployment rate back down to a 30-year low of 6.1%.

The seasonally adjusted annual rate of housing starts decreased to 211,500 units in December, from November's 229,300, according to the Canadian Mortgage and Housing Corporation.

Consumers paid 1.6% more for the goods and services in the Consumer Price Index (CPI) basket in December 2006 than they did a year earlier. It was a slightly faster pace than the 12-month change of 1.4% in November.

Still, December's increase was below the average gain of 2.0% in the all-items CPI for 2006 as a whole, and well below the much hotter pace in the first eight months of 2006.

Please consult the release "Consumer Price Index: A preview of the upcoming basket update".

December's upturn was due mainly to the second consecutive 8.2% monthly increase in homeowners' replacement cost, representing the worn-out structural portion of housing. Since August 2006, this index has posted monthly increases of over 8.0%.

In addition, drivers paid slightly more for gasoline. But this was offset by another decline in natural gas prices in the wake of milder weather.

Excluding energy, the 12-month change in the all-items index rose 1.7% in December, the result of sustained growth in prices for owned accommodation. Over the past four months, this index has remained relatively stable.

On a monthly basis, consumer prices edged up 0.2% between November and December last year, the same increase as in the previous month. The monthly index, excluding energy, slipped 0.1% in December after a 0.2% increase the month before.

The core Consumer Price Index, used by the Bank of Canada to monitor the inflation-control target, rose by 2.0% between December 2005 and December 2006, compared with 2.2% the previous month. The monthly core CPI slipped 0.2% in December, following a 0.3% increase in November.

12-month change: Prices in housing sector keep increasing

December's 12-month change of 1.6% in the all-items index was attributable primarily to continually rising costs paid by homeowners in recent months, especially in Alberta.

For a second straight month, homeowners' replacement cost, which represents the worn-out structural portion of housing and is estimated using new housing prices (excluding land), shot up by 8.2%. Since August 2006, increases in this index have exceeded 8.0%.

Most of this increase in replacement cost can be accounted for by the ongoing demand for new houses, fuelled by rising employment and a vigorous economy. In November 2006, building permits reached yearly all-time highs thanks to a strong increase in residential construction in the western provinces, and Alberta in particular, where the economic boom is continuing.

In Alberta alone, replacement costs soared 43.1% in December, the main factor behind the rise in this index at the national level. Price increases elsewhere played a much more modest role. Even so, replacement costs rose 10.3% in Saskatchewan and 6.8% in Manitoba.

Mortgage interest cost, on the rise since early 2006, continued its upward movement with a 4.1% gain. This index was relatively stable in 2005.

Also contributing to the 12-month change in the all-items index were price increases in electricity. Electricity prices rose 6.7% between December 2005 and December 2006, thanks primarily to hikes of 23.7% in Alberta and 7.5% in Ontario.

Rising production costs contributed to a 2.5% increase in the price of foods purchased in restaurants. Higher tobacco taxes in some provinces resulted in a 4.7% rise in cigarette prices.

On the downside, milder temperatures brought a sixth consecutive monthly decline in natural gas prices, which fell 7.5% between December 2005 and December 2006. Almost all Canadian consumers benefited, except residents of Alberta, where natural gas prices rose 3.3%.

Prices for purchasing and leasing vehicles fell 1.9% between December 2005 and December 2006, the result in part of fierce competition among manufacturers who were offering discounts on new 2007 models.

Elsewhere, the growth in the all-items CPI was slowed by continually falling prices for computer equipment and supplies, as well as lower prices for men's and women's clothing.

Month-over-month: Slight increase in gas prices

Gasoline prices, as well as increases for cigarettes, household maintenance and repairs and mortgage interest costs, pushed up the all-items index between November and December. They were partly offset by declines in men's and women's clothing and in some non-alcoholic beverages.

Gasoline prices climbed 4.1% after several months of declines. This growth was slightly less than the 4.6% rate posted six months earlier in July.

Gasoline prices were up from coast to coast, except in Manitoba (-0.1%). The biggest increase, 6.8%, occurred in Prince Edward Island. Other increases ranged from 6.6% in Nova Scotia to 1.0% in Saskatchewan.

Cigarette prices rose 1.7% between November and December 2006. Prices for household maintenance and repairs were up 1.7%, while the cost of mortgage interest edged up 0.4%.

Discounts associated with fall sales, combined with holiday sales, reduced the price of women's clothing by 5.4%. It was the biggest decline ever for the month of December, and the largest decrease in women's clothing since a 5.8% plunge in April 2006.

It was the same case with prices for men's clothing, which fell 4.1%, the biggest decline since a 5.1% drop in June 2003.

Prices were down 3.3% for non-alcoholic beverages, the result of holiday season discounts on soft drinks.

Annual change: Homeowners paid more this year

This release provides the annual average movement in components of the Consumer Price Index for 2006 as a whole. Annual average indexes are calculated by averaging index levels over the 12 months of the calendar year.

Annual averages should not be confused with the 12-month change in the CPI. This compares indexes for a given month to indexes for the same month a year earlier.

For 2006 as a whole, prices rose on average by 2.0%, compared with 2.2% in 2005, 1.9% in 2004 and 2.8% in 2003. The increase in 2003 was the biggest annual average increase since 1991.

In 2006, lower gasoline prices helped offset a strong upturn in prices in the owned accommodation sector.

Consumer Price Index: A preview of the upcoming basket update

Statistics Canada has announced a major update of the Consumer Price Index to reflect changes in the spending patterns of Canadian households.

The update, which occurs periodically, is designed to ensure the CPI's reliability for three key purposes, a measure of inflation, a statistical series deflator, and a tool for indexing various payments and transfers.

The update will take effect on June 19, 2007, when data for the reference period of May 2007 are released in The Daily.

It will include two major changes: the weights of various items in the basket of goods and services used to calculate the index will be updated from 2001 to 2005; and the CPI base year (the period for which the value 100 is assigned to the index) will change from 1992 to 2002.

In addition, changing base periods requires the creation of new tables in CANSIM, Statistics Canada's database. The existing series will be discontinued. The new tables and identifiers will be announced in the spring of 2007 and will be available on June 19, 2007.

Also, the content and format of two publications will be reviewed and updated: Your Guide to the Consumer Price Index (62-557-XIB) and Consumer Price Index (62-001-XIB). An update of the Consumer Price Index Reference Paper is planned at a later date.

Although the CPI base year will change from 1992 to 2002, the base period 1992=100 will still be retained for the all-items index. The Consumer Price Index with base period 1986=100 will be discontinued.

In the case of the 1986=100 series, a conversion factor will be available to users on request. When changes occur in the base year, they will be synchronized with changes in the Canadian System of National Accounts.

Users should note that the changeover to the base year 2002=100 will in no way alter rates of changes measured for previous periods, barring rounding.

The weights for the various components of the basket of goods and services are being updated on the basis of the most recent Survey of Household Spending (SHS). The update ensures that the CPI reflects any changes in the consumption patterns of Canadians.

The weights between January 2003 and mid-2007 are based on 2001 consumption patterns. The new basket will be based on patterns captured by the 2005 SHS.

A special effort has been made to ensure that information technology products are reflected as accurately as possible in the CPI, particularly since they have evolved at a dizzying pace in recent years.

The "rental of videotapes and videodiscs" index will be expanded to include the rental of video games for consoles.

The "photographic equipment" and "photographic services and supplies" categories will be redefined to provide a clearer distinction between the goods component and the services component. After the update, the new categories will be "photographic equipment and supplies" and "photographic services."

The "audio discs and tapes" purchase and the "video tapes and videodiscs" purchase indexes will be replaced with a single index covering the purchase of both audio and video media.

Though unpublished, structures under the "video equipment" and "audio equipment" headings will be updated to include new electronic products.

A special effort has also been made to reflect recent new trends in health care. Two new indexes will be published: one for ophthalmological goods, and another for ophthalmological services.

A final, less important change was dictated by the elimination of detail in the SHS. Detailed indexes for "cooking utensils" and "tableware and flatware" will be discontinued. Now, only the "kitchen utensils, tableware and flatware" aggregate will be published.

Two new special aggregates will be computed and disseminated: the CPI all-items less gasoline and the CPI all-items less housing, insurance and financial services.

Wholesalers sold an estimated $41.6 billion worth of goods in November, a gain of only 0.1% from October. But it did halt a mini-slide of two consecutive months.

Sales in constant dollars, which exclude the effects of price fluctuations, also rose by 0.1% in November.

Overall, four out of the seven wholesale sectors posted increases during November, led by wholesalers of automotive products and personal and household goods. Sales in the automotive products sector alone rose 1.5%, halting a three-month decline.

But these gains were mostly offset by declines in the "other products" sector and the farm product sector.

The overall trend for wholesale sales deteriorated somewhat during late summer and early fall, the result in large part of the weakness in the motor vehicle industry.

However, thanks to the strong gains accumulated in the first eight months of the year, wholesalers are still on track to record healthy growth for 2006.

Automotive sector halts three-month slide

Following a three-month slide between July and October when sales declined a cumulative 20%, the automotive products wholesalers saw a modest uptick in November as sales increased 1.5% to $7.6 billion.

Motor vehicles, which account for around 80% of sales in this sector, rose 1.6%, while sales of motor vehicle parts and accessories were up 1.3%.

November's increase in motor vehicle sales coincided with a pickup in passenger car exports, which rose for the second time in three months. Nevertheless, auto exports have remained on a downward trend throughout the year, in line with the weakening of the US auto market.

Domestic auto sales, on the other hand, continued to fare well, with the latest release of the New Motor Vehicle Sales Survey reporting a 3.0% rise in November. Preliminary December figures from this survey indicate that 2006 will be the second best sales year on record in Canada.

Personal and household product sector paints a contrasting picture

Overall sales in the personal and household products sector rose 1.0% during November to $6.2 billion. However, there were mixed fortunes for the trade groups within this sector, as robust sales of household and personal goods contrasted with declines in the pharmaceutical and apparel groups.

Wholesalers of household and personal products recorded their third increase in four months in November, as sales jumped 6.3% to $2.8 billion. Higher demand for home entertainment equipment was behind much of the November increase. Within this category, sales of flat panel televisions have been especially high of late thanks to significant price declines that have brought them within the reach of a larger number of consumers. With producers and retailers battling for market share, prices are expected to continue falling over the coming year.

The pharmaceutical trade group saw its largest monthly decline in three years in November, down 2.8% to $2.6 billion. While this was the second consecutive monthly drop for this trade group, the longer term trend remains strong, thanks in part to the increasing demand for prescription drugs. According to the latest release of the Quarterly Retail Commodity Survey, sales of prescription drugs were 12.8% higher in the third quarter of 2006 compared to the same quarter in 2005.

Sales of "other products" down for third consecutive month

Sales in the "other products" sector fell 3.2% to over $4.9 billion, the largest monthly decline since June 2005. This sector consists primarily of agricultural products, chemicals, recycled materials and paper products.

Lower sales of agricultural supplies (primarily fertilizers) were behind the latest monthly drop, which was the third in a row for this sector.

Although the overall trend for this sector has been rising over the past year, not all wholesalers in this sector have participated in the rise. While wholesalers of agricultural supplies have seen lower sales over the first 11 months of the year, with lower fertilizer prices partly to blame, wholesalers of recycled metals have seen their receipts soar in line with strong increases in metal prices.

Farm product sector ends string of recent gains

November was also a weak month for the farm products sector, as sales declined 5.3% to $461 million, ending a string of five consecutive monthly increases. Wholesalers of live animals, which make up around half of the overall sales in this sector, were responsible for most of the drop. While wholesalers in this sector have benefited from the opening of the US border to Canadian cattle in mid-2005, the failure to lift restrictions on older cattle mean that the industry has yet to attain the sales levels prior to the bovine spongiform encephalopathy scare.

Gains for wholesalers in Ontario and Quebec

Ontario and Quebec, which together account for around 70% of all wholesale sales, recorded the most significant gains in dollar terms in November.

Following three months of declines, sales in Ontario rose by 1.0% to $20.9 billion in November. The turnaround in the automotive sector, which was a major factor behind the previous declines, explains most of November's uptick in sales.

Sales in Quebec rose for the third time in four months in November, up 1.1% to $7.9 billion. The food sector, which makes up around one-quarter of all wholesale sales in this province, accounted for the lion's share of the growth, but wholesalers of motor vehicles and building supplies also had a good month. After faltering a little at the beginning of the year, the trend for sales in Quebec has been rising.

The picture in British Columbia was less rosy, as the province recorded its largest monthly decline since April 2003. The drop was concentrated in the ever volatile "other products" sector. Despite the large drop in November, the province is on course to record another healthy year of growth, thanks in large part to strong sales of building materials and machinery and electronic equipment.

Other notable declines were in Nova Scotia (-4.2%), where the drop was broadly based, and Manitoba (-3.9%), where lower sales of agricultural products and machinery and equipment broke a string of three consecutive monthly increases.

Inventories continue string of recent rises

Inventories rose for the fifth time in the last six months in November, up 0.9% to $53.8 billion. With sales remaining essentially flat during the month, the inventory-to-shipment ratio edged up for the fourth consecutive month to 1.29 in November, its highest level since August 2003.

Overall, 8 out of 15 trade groups recorded higher inventory levels in November, with motor vehicles and machinery and equipment posting the largest increases.

Also noteworthy was the fact that inventories of metal products fell during the month for the first time since January 2006.

Workbrain and BearingPoint survey finds retailers looking to budget creation and management solutions to remedy labor budgeting challenges

TORONTO - Workbrain Corporation, the leading provider of workforce management solutions for large enterprises , January 17, 2007, announced survey results that showed retailers are interested in a budget creation and management solution to help close the gap on the disconnect between head office and store level operations. Workbrain and BearingPoint, a leading management and technology consulting company, conducted the survey during the month of December, when many retailers prepare for their annual labor budgets.

The survey, conducted to gain greater insight into retail labor budgeting and planning processes, targeted managers, directors and vice presidents working at U.S.-based retailers with more than 5,000 employees. The survey indicates that retailers are aware of the divide between headquarters and store operations, and will look to sophisticated labor budgeting systems to close the gap.

Disconnect Between Head Office and the Field

Razor thin retailer margins are forcing head office decision-makers to carefully scrutinize labor dollars, sometimes months in advance of actual spend. The complexities of labor allocation in retail force these same decision-makers to use "rules-of-thumb" forecasting and a "template" approach to project store budget requirements. One-half of survey respondents feel that store managers do not agree with, or "buy in" to annual labor budget plans. Nearly 30% of respondents attributed this to the lack of store-level input into labor budgets and 40% of respondents said that less than three-quarters of their managers actually hit their budget targets.

Inefficient Budgeting Processes and Tools

The survey also revealed that a typical annual budgeting process takes, on average, nine weeks. Respondents reported that typical tools used to create and edit budgets include office tools such as spreadsheets (45%), various accounting modules (20%), and Enterprise Resource Planning (ERP) tools (13%). Interestingly, 58% of respondents revealed that they were not fully confident in the accuracy of their organization's annual budget.

Retailers Understand the Issues

According to survey respondents, the top three changes they would make to enhance their organization's budgeting creation and management process are automation (30%), increased accuracy (35%) and the use of retail best practices (39%). Similarly, 75% of respondents stated that they are interested in a sophisticated budget creation and management solution to help mitigate issues associated with the labor budgeting process.

"As retailers continue to grow organically and through consolidation, it will be increasingly difficult to provide a consistent customer experience in every store," says John Hoeller Jr., Managing Director for Retail at BearingPoint. "Creating a workload and service-based budget by store and by process is essential to delivering on that promise."

"The top-down approach that most retailers use to create labor budgets doesn't take into account the real-life demands of store operations," said Tony Marzulli, Senior Vice President of Marketing and Products at Workbrain. "Retailers can better realize their potential by leveraging budget creation and management solutions that connect headquarters and stores using both a top-down and bottom-up approach. The benefits of this approach will be realized in daily operations, since store managers are able to make better decisions about how they spend budgeted labor dollars to serve their customers."

Overall, consumers spent $103.1 billion on goods and services in retail stores in the third quarter of 2006, up 7.0% over the third quarter of 2005. Among major commodity groups, increases ranged from a high of 10.0% in health and personal care products to a low of 4.1% in food and beverages.

Health and personal care products exhibited the strongest gain during the third quarter of 2006, advancing by 10.0% to $8.4 billion. Sales of health and personal care products have grown faster than total retail sales for the last four quarters. Prescription and over-the-counter drugs are the driving forces behind this robust growth, climbing by 12.2% to $5.6 billion. Prescription drugs advanced by 12.8% to $4.6 billion while over-the-counter drugs, vitamins and other health supplements increased by 9.2% to $1.0 billion. Health and personal care products accounted for eight cents of every retail dollar spent in the third quarter of 2006.

In the third quarter of 2006, retail sales for furniture, home furnishings and electronics products amounted to $9.0 billion, a year-over-year increase of 9.2%. Sales of furniture, household appliances and electronics rose by 8.9%, thanks to a 14.8% increase in sales of household appliances. Sales of home furnishings grew by 10.1%. Sales of this commodity group have been growing at a brisk clip in 2006 after witnessing moderate increases in the previous three years.

Clothing, footwear and accessories had their strongest year-over-year growth in the third quarter of 2006 since the beginning of the series in 1998, with an 8.7% increase resulting in total sales of $8.1 billion. The best performance in this category was by footwear, which grew by 10.5%. Sales of women's clothing rose by 9.1% while those of men's clothing were up by 6.9%. Lower prices for all categories of clothing and unseasonable weather patterns are among the factors that may have contributed to this strong performance. Clothing and accessories stores contribute to two-thirds of the sales of this category, while general merchandisers account for one-quarter of the sales.

Sales of motor vehicles, parts and services totalled $22.8 billion in the third quarter of 2006, 6.5% more than the same quarter last year. The value of new vehicles sales rose by 5.7% on the strength of a 6.4% increase in new truck sales (which include minivans, sport utility vehicles, light and heavy trucks, vans and buses), and new car sales, which increased 4.9%. Sales of used automotive vehicles posted a strong 8.3% year-over-year increase, which outpaced for the first time since the second quarter of 2002 the increases in new car sales.

Sales of food and beverages totalled $21.9 billion, up 4.1% from the third quarter of 2005. Since the second quarter of 2005, the growth in sales of food and beverages has lagged behind total retail sales. Food sales rose by 3.8% while those of beverages (alcoholic and non-alcoholic) rose by 5.1%.

Note: The Quarterly Retail Commodity Survey collects national level retail sales by commodity, from a sub-sample of businesses in the Monthly Retail Trade Survey. Quarterly data have not been adjusted for seasonality. All percentage changes are year-over-year.

OAKVILLE, ON - Tim Hortons Inc. announced January 4, 2006, same-store sales increases of 9.3% at Tim Hortons(R) restaurants in Canada and 8.3% at restaurants in the United States for the fourth quarter ended December 31, 2006.

Fourth-Quarter Same-Store Sales Summary
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4Q 2006 4Q 2005 2006 FY 2005 FY
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Tim Hortons Canada 9.3% 5.8% 7.5% 5.2%
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Tim Hortons U.S. 8.3% 6.7% 8.9% 7.0%
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(*) As of October 1, 2006, 98% of the Company's stores in Canada - and 80% of the stores in the U.S. - were franchised. >>

"Tim Hortons had a strong finish to 2006 with solid sales growth in both Canada and the U.S. in the fourth quarter," said Chief Executive Officer and President Paul House. "Our customers continue to respond positively to the value, convenience and variety offered by Tim Hortons and we are pleased that this has translated into positive sales growth throughout the year." In the fourth quarter, the company introduced its breakfast sandwich in Canada, promoted its chili and garlic toast combo in both Canada and the U.S., and featured its holiday merchandise program in the month of December. Also featured in the quarter were a Pumpkin Spice Glazed Donut, Danish Fruit Bites and a Chocolate Raspberry Donut.

New provider of specialty foods, imported cheeses, elegant treats & gourmet staples

WATERLOO – That's what David’s Gourmet, David Ehrenworth says. The new stores offers specialty foods, imported cheeses, elegant treats and gourmet staples. It opened the flagship Waterloo store on December 13th at 36 Northfield Drive. Designed to provide Kitchener-Waterloo area residents with an upscale, gourmet food experience for those with even the most discerning palates.

“I am ecstatic to share my love of gourmet specialty food with the Kitchener-Waterloo community”, remarked David Ehrenworth, Owner and Operator of David’s Gourmet. “We have brought excitement back to the shopping experience by igniting the senses – mind, body and soul.”

Located between uptown Waterloo and the Village of St. Jacob’s, the 4,000 square-foot store reflects a mix of old world and contemporary visual experiences designed by famed local designer Christopher Agombar. The store features a number of unique and enticing elements. Most notably: replica statue of Florence’s David towering over the fresh bread bins, made-to-order deli sandwich stations, over 200 varieties of cheese, and state-of-the-art open concept ceilings lit by gothic inspired chandeliers. The layout is also marked by a ‘child welcoming section’ of candy, reminiscent of years past.

Specially trained artisans will cater to the customer’s needs and on an ongoing basis the store will boast special guests who will provide time tested recipes and an array of unique products.

"There is a lot of "buzz" around the city about our store and we would love to continue the momentum," finishes David.

Rogers has served as acting president since May, before which he was executive vice-president, Restructuring and Business Improvement, for Sears Holdings Corp. (SHLD).

Crowley is a director of Sears Holdings and has been a director at Sears Canada since March 2005.

Sears Canada, Toronto, is a department-store retailer.

The largest year-over-year increases, at the provincial level, were recorded in Saskatchewan (+10.1%), Alberta (+9.8%), Nova Scotia (+8.5%) and Manitoba (+8.1%). Ontario, with about 41% of the industry sales in October, recorded an increase of 5.1%. Quebec, with almost 20% of the industry sales in October, recorded a decrease of 2.9%.

The increase in sales, at the national level, was due to higher sales at limited service (+7.2%) and full service restaurants (+2.4%). These two sectors account for almost 85% of the sales for the industry. Food service contractors, which account for almost 6% of sales for the industry, advanced 10.8%.

Food services sales
	October 2005r	September 2006r	October 2006p	October 2005 to October 2006
	Not seasonally adjusted
	$ thousands			% change
Total, food services sales	3,213,285	3,399,574	3,342,049	4.0
Full-service restaurants	1,504,712	1,587,747	1,540,518	2.4
Limited-service restaurants	1,220,081	1,312,681	1,308,453	7.2
Food service contractors	190,965	201,851	211,679	10.8
Social and mobile caterers	79,775	82,105	77,020	-3.5
Drinking places	217,752	215,190	204,379	-6.1
Provinces and territories
Newfoundland and Labrador	35,317	34,199	33,528	-5.1
Prince Edward Island	12,552	14,978	13,486	7.4
Nova Scotia	75,475	87,564	81,896	8.5
New Brunswick	57,757	55,047	55,279	-4.3
Quebec	676,461	677,766	656,907	-2.9
Ontario	1,305,423	1,368,741	1,372,461	5.1
Manitoba	80,288	85,228	86,819	8.1
Saskatchewan	80,795	87,105	88,950	10.1
Alberta	382,864	421,498	420,436	9.8
British Columbia	496,839	558,135	523,326	5.3
Yukon	2,477	2,518	2,412	-2.6
Northwest Territories	6,663	6,408	6,205	-6.9
Nunavut	373	386	345	-7.6
r revised p preliminary

Retail sales fell in October for the second month in a row, as sales in the automotive sector continued to decline and back-to-school spending on clothing wrapped up.

Total retail sales fell 0.7% to an estimated $32.6 billion in October. October's decline, combined with the decrease in September, nearly offset the gains made in July and August, resulting in a relatively flat trend for retail sales. Prior to this period, retail sales have been generally rising at a rapid clip since 2004.

Unlike September's decline, which was concentrated in the automotive sector, the weakness in October was more widespread with only three of the eight retail sectors registering sales increases. Retail sales excluding new, used and recreational vehicles and parts dealers also decreased by 0.7%.

Sales in the automotive sector fell by 1.2% after dropping 5.3% in September, mainly due to a drop in gasoline prices. The clothing and accessories stores sector saw their sales fall by 4.0% in October after a spending spree that drove sales up 6.6% in September. The general merchandise stores sector, which includes department stores that sell clothing, saw their sales follow the same pattern. Sales fell by 1.1% in October in this sector after an increase of 1.8% in September.

Sales fell for the second month in a row in the building and outdoor home supplies stores sector (-0.8%), while retail spending in the furniture, home furnishings and electronics stores sector fell by 0.3% in October. This was only the third monthly sales decline for this sector in 2006.

Partially offsetting these declines were sales gains in the food and beverage stores (+0.4%), pharmacies and personal care stores (+0.1%) and miscellaneous retailers (+0.9%) sectors. For the latter, strong sales gains among miscellaneous stores retailers (+2.6%) more than offset a sales decline in sporting goods, hobby, music and book stores (-0.7%).

Once price changes were taken into account, total retail sales fell by 0.5% in October after a 0.1% increase in September.

Continued weakness in the automotive sector

In October, continued sales declines at gasoline stations and used and recreational motor vehicle and parts dealers pulled down sales in the automotive sector. Sales at new car dealers, however, were flat.

Sales at gasoline stations fell by a further 2.5% in October, after declining by a record 12.3% in September due to plummeting gasoline prices. The value of sales at gasoline stations was at its lowest level in October since May 2005.

Used and recreational motor vehicle and parts dealers saw their sales fall for the third month in a row (-4.0%). Before this recent fall off, sales by these dealers increased at a rapid clip since the fall of 2005, and peaked in April 2006. This gain was mainly driven by increased demand in recreational vehicles. Notwithstanding the recent slide, sales remained at historically high levels.

As back-to-school spending wrapped up, sales at clothing stores fell 4.5% after spiking in September. In the same way, sales at shoe, clothing accessories and jewellery stores fell in October (-2.3%) after two strong months.

Sales at home centres and hardware stores have slowed down in recent months. In October, these stores registered their second straight monthly sales decline (-1.3%) and is coincident with the cooling of the Canadian housing market. According to the Canadian Mortgage Housing Corporation, housing starts in the third quarter of 2006 were at their lowest level since the first quarter of 2005. Still, sales in this group of stores have been rising at double digit annual rates since 2002.

Partially offsetting these declines were gains in the food and beverage stores sector. Within this sector, both supermarkets and beer, wine and liquor stores sales rose by 0.4%. Convenience and specialty food stores sales continued to climb in October with a 0.3% increase. Sales have been fairly healthy in 2006 for this group of stores with only one slight decline in July.

Pharmacies and personal care stores sales were relatively flat in October (+0.1%), marking the 12th consecutive monthly sales increase for this retail sector. Sales in these types of stores have been fairly strong since the start of 2006. After a near-record quarterly growth of 4.7% ending June, sales gains slowed in the third quarter but were still strong at 2.7%.

Widespread declines across the country

Continued weakness in the automotive sector and a slowdown in back-to-school shopping caused sales to decline in 12 of the 13 provinces and territories in October.

In October, retail sales fell for the second consecutive month in Quebec (-1.3%) and Ontario (-0.6%). Previously, sales in Quebec had been generally growing since the fall of 2005. In Ontario, fluctuating sales have made the sales trend in this province relatively flat since April 2006.

Retail growth stalled in Alberta (-0.1%) and British Columbia (-0.1%), as sales failed to advance for the second month in a row. Despite the modest declines of late, year-over-year increases in Alberta remained consistently above 15% for each month in 2006.

Saskatchewan (-2.2%) and Manitoba (-2.1%) both experienced declines in retail sales in October. October's weakness was only the second monthly sales decline in Manitoba in 2006.

Yukon was the only territory that registered a sales gain (+0.2%) in October.

Related indicators for November

Employment edged up an estimated 22,000 in November, the result of gains in part-time work. The unemployment rate rose 0.1 percentage points to 6.3%, as more people entered the labour market in search of work.

The seasonally adjusted annual rate of housing starts increased marginally to 225,000 units in November, from 223,200 units in October, according to the Canada Mortgage and Housing Corporation.

Preliminary sales data from the auto industry indicate that November sales are expected to rise by approximately 3.0%, mainly due to increased demand for passenger cars.

Retail sales
	October 2005	July 2006r	August 2006r	September 2006r	October 2006p	September to October 2006	October 2005 to October 2006
	Seasonally adjusted
	$ millions					% change
Automotive	10,521	11,616	11,677	11,061	10,927	-1.2	3.9
New car dealers	5,837	6,288	6,486	6,332	6,337	0.1	8.6
Used and recreational motor vehicle and parts dealers	1,254	1,534	1,514	1,504	1,444	-4.0	15.1
Gasoline stations	3,430	3,794	3,676	3,225	3,146	-2.5	-8.3
Furniture, home furnishings and electronics stores	2,171	2,318	2,345	2,348	2,340	-0.3	7.8
Furniture stores	767	791	809	805	810	0.7	5.6
Home furnishings stores	408	445	448	455	445	-2.3	9.0
Computer and software stores	138	135	137	129	126	-2.7	-8.7
Home electronics and appliance stores	858	947	951	959	959	0.0	11.8
Building and outdoor home supplies stores	1,909	2,094	2,132	2,119	2,102	-0.8	10.1
Home centres and hardware stores	1,559	1,708	1,738	1,730	1,707	-1.3	9.5
Specialized building materials and garden stores	349	387	394	389	395	1.3	13.0
Food and beverage stores	7,219	7,344	7,388	7,394	7,420	0.4	2.8
Supermarkets	5,222	5,280	5,303	5,286	5,305	0.4	1.6
Convenience and specialty food stores	758	799	804	811	813	0.3	7.3
Beer, wine and liquor stores	1,238	1,265	1,280	1,297	1,302	0.4	5.1
Pharmacies and personal care stores	2,045	2,250	2,265	2,281	2,282	0.1	11.6
Clothing and accessories stores	1,745	1,847	1,876	2,000	1,920	-4.0	10.0
Clothing stores	1,324	1,409	1,427	1,529	1,459	-4.5	10.2
Shoe, clothing accessories and jewellery stores	421	437	449	472	461	-2.3	9.4
General merchandise stores	3,688	3,876	3,922	3,993	3,947	-1.1	7.0
Miscellaneous retailers	1,587	1,678	1,671	1,692	1,707	0.9	7.6
Sporting goods, hobby, music and book stores	801	844	851	875	870	-0.7	8.5
Miscellaneous store retailers	785	834	820	816	837	2.6	6.6
Total retail sales	30,884	33,023	33,275	32,888	32,645	-0.7	5.7
Total excluding new car dealers, used and recreational motor vehicle and parts dealers	23,793	25,201	25,274	25,052	24,864	-0.7	4.5
Provinces and territories
Newfoundland and Labrador	495	503	504	501	500	-0.0	1.0
Prince Edward Island	117	122	123	123	122	-0.7	4.5
Nova Scotia