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The ink is barely dry on February's relatively calm Canadian retail sales report, but economists should brace themselves for the March figures. Early indications are that, at least in one area, the numbers will fall sharply. The good news, however, is that, at least for this one data point, it's not the economic climate, but the actual climate, that is to blame.
Last March, says Jack Klaiman, president of Oberfeld Snowcap – Canada's leading retail consultancy with 150 retail clients, including the Aldo, Michael Kors and Dynamite chains – clothing and accessories stores did phenomenal business when spring came early in March. "The weather was in the 20s across the country and everybody shot out of their spring sales a month early. People were selling flip-flops because the weather was so brilliant."
The statistics bear that out: Retail sales for March 2012 in the clothing, shoe and jewellery, luggage and leather goods categories shot up by between eight and 10 per cent year over year – an increase of more than $200-million, to $2.3-billion for the month. Total retail trade was driven by strong auto sales, increasing by 4.1 per cent year over year, to $39-billion in sales for the month.
With a more typically wintery March this year, Mr. Klaiman says his clothing and accessories retailers tell him sales were down about 10 per cent year over year – a calamitous year over year drop at first blush, but putting this March roughly on par with the more typical March 2011 figures. "People were buying winter clearance stuff" for discounts in March as they normally do rather than shelling out higher prices for spring wear, Mr. Klaiman said.
Further indications that the slump is just a temporary fluctuation: since the weather warmed up across Canada over the past week, Mr. Klaiman says his clients have started to report a bloom in sales. "If you're a retailer, March 2012 was an anomaly," he says. "It almost shouldn't be counted."
Sean Silcoff is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights, and follow Sean on Twitter at @seansilcoff.