Despite Surprisingly Low Inflation Rate, Canadian Retail Sales Are Up

    Feb 10 2017

    Topics: cash management

    Economists forecasted the Canadian inflation rate to reach 1.4% in November, after a 1.5% increase in October. But many were surprised to find that the rate only increased by 1.2%. The Bank of Canada was targeting its inflation rate at about 2%.

    Unrelated reports show that Canadian retail sales have been driving upward. Low prices of fresh meat and produce (the price of lettuce dropped by 18.7%, and tomatoes dropped by 11%) as well as travel tours (4.2%), are believed to have played a significant role in the slowing Canadian inflation rate.

     

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    The trend in retail sales has been on the upswing for three straight months, reaching a 1.1% increase from September to October, amounting to just about $45 billion.

    What Do These Statistics Mean?

    In order to examine these underlying shifts in consumer prices, Statistics Canada has announced that it will begin using three new indicators to measure inflation, opposed to the single indicator that it has been using.

    The change began on Dec. 22, 2016, when Statistics Canada released its November numbers. In addition to the new measures, the agency will continue to publish the all-items consumer price index, causing confusion among traders who may not realize how these indicators will be weighted, as they may shift.

    The Reason for This Change

    The reason behind the change is likely because the Bank of Canada is unsatisfied with the fact that many volatile products—including retail items like food—were not included in the core inflation index.

    The low inflation rate reported may seem like a good thing for consumerism, but in reality that means that fewer people have the money to spend on goods, causing a low supply and demand chain.

    But the previously implemented index did not take many retailers into account. With some prices dropping significantly, retailers should be aware of an influx of sales, and introduce retail enterprise management systems to keep track of their revenue.

    Retail Management Systems

    CashTech Currency specializes in cash management solutions and retail management systems to make business function more fluidly during this upswing. Cheque scanners also allow businesses to electronically deposit cheques as they're written, without the worry of delay.

    While the Canadian economy as a whole appears to be unstable, know that retail enterprise management systems are still vital for your industry, especially if you're experiencing an increase in sales. Contact us today to hear about possible retail management solutions.

    A CFO's Guide: How Cash Handling Is Affecting Your Bottom Line

    Andrea Lombardi

    Andrea Lombardi

    Andrea joined the CashTech team upon its inception in 2003. Learning the business from the ground up, she now utilizes her expertise in account management, planning, and negotiation while managing the daily operations of CashTech’s sales, marketing, and logistics departments. Andrea holds a bachelor’s degree from the University of Western Ontario. She enjoys travelling and has a passion for personal fitness, including obtaining her kettlebell certification. Andrea lives in Toronto with her husband and two young sons.

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