Kubas: Canadian furniture sales to rise 1.8% in '08
By Michael J. Knell -- Furniture Today, July 27, 2008
TORONTO — Canadian furniture stores will see the quick, steady growth they enjoyed over the past few years slow to an anemic crawl this year, according to a new study published by Kubas Consultants, a retail specialist based here.
In the latest edition of its Retail Sales Outlook, Kubas is forecasting that furniture store sales will total C$10.3 billion in 2008, a modest 1.8% advance over 2007.
However, home furnishings stores — a category covers everything from floor covering to lamps and lighting specialists — are expected to turn in a slightly better performance, gaining 4.7% to C$6.3 billion.
Appliance and consumer electronic stores, meanwhile, are expected to continue their technology-driven upswing, enjoying an uptick of 7.7% this year to sales of C$13.3 billion.
Kubas is forecasting that total location-based retail in Canada will grow 5.4% this year to $434.8 billion.
“The economy in central Canada is practically in a recession,” the firm said. “While there is strong economic growth in Saskatchewan and Newfoundland, it's not nearly enough to offset the declines in Ontario and Quebec.”
While total retail actually gained 9.5% in the first two months of 2008, “it was all due to gas prices — gasoline station sales were up a whopping 25% in the period.”
Kubas said its projections for total retail have been revised upwards, to 5.4% from 5%. “Again, it's all due to gas prices,” the report said. “Practically all retailers other than gasoline stations are expected to see lower sales growth.”
The consultant also said that Canada's unemployment rate is rebounding — after falling to 5.8% it inched back to 6.1% recently — and that layoffs in manufacturing, particularly in central Canada, are continuing.
“One positive side, while the housing market is declining, it appears to be headed for a soft landing rather than a crash,” Kubas said.
“First quarter sales growth for furniture and home furnishings stores and for building materials and other home improvement retailers softened markedly from previous rates, and a slowing housing market implies this trend will continue,” the report continued.
Kubas is also reporting that more Canadians are souring on the economy in general.
“Consumers have now become decidedly pessimistic on the overall Canadian economy, at least on net,” the report said. “In 2008, those saying the economy is getting worse increased significantly to 44%, while those saying things are getting better declined to 34%.”
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