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The Loblaws store at Queen’s Quay in Toronto is seen in this file photo.

Moe Doiron/Moe Doiron/The Globe and Mail

A trend of relatively stagnant retail sales continued in May. Retail sales crept up slightly over the month, following a drop in sales in April, Statistics Canada said on Tuesday.

Retailers have been experiencing more or less flat sales since November 2011, and May's 0.3-per-cent gain for total sales of $38.9-billion shows the second quarter of 2012 is likely to be more of the same. Statistics Canada also revised its April figure downward on Tuesday to reflect a sales decline of 0.6 per cent in that month.

"May's gain followed a very disappointing report in April and points to consumption providing limited support to growth for the second quarter in a row," said Dawn Desjardins, assistant chief economist at Royal Bank of Canada in a research note. "This pullback in the pace of spending most likely is a reflection of Canadian consumers exercising caution given the elevated levels of household debt and volatility in financial markets due to the ongoing European crisis."

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In volume terms, sales were up slightly more in May at 0.7 per cent. There were sales gains in just more than half of the 11 retail subsectors Statistics Canada tracks.

Sales receipts at grocery stores increased for the first time this year at 1.8 per cent. Sales at traditional supermarket and grocery stores have been flat since the beginning of 2011 Statistics Canada noted, as general merchandise stores have been gaining market share for food sales. Lower prices at the pump led to a 1.4-per-cent decline in sales at gas stations, and auto and parts dealers also saw a 0.4-per-cent decrease. In recent months, new car dealers have seen a drop in sales, but year-to-date sales for 2012 stand 9.5-per-cent higher than for the same period in 2011, reflecting a pick-up in the subsector.

Electronics and appliance sales have been on a downward trend since the beginning of 2012, and May's sales fell 0.8 per cent.

Low interest rates and a recent pick-up in wages mean domestically, economic conditions are good despite sluggish retail sales results this year– but uncertain growth prospects in the international realm mean the Bank of Canada will continue to hold firm on its 1 per cent overnight benchmark rate.

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