File photo of a car dealership in Toronto.SARAH DEA/The Globe and Mail
Statistics Canada reported retail sales edged up 0.1 per cent to $39.1-billion in September, the third straight monthly increase, helped by sales of new cars.
The largest increase in dollar terms among all subsectors was a 0.6 per cent rise at motor vehicle and parts dealers, with new car sales up 0.9 per cent.
However, BMO Capital Markets economist Robert Kavcic noted that excluding auto sales, the results were flat and below consensus.
Economists had expected growth of 0.5 per cent for the month.
"Indeed, sales growth has now cooled to a humble 1.8 per cent year over year as Canadian retailers face some stiff challenges," Mr. Kavcic wrote in a note to clients.
"In addition to cooling domestic consumer credit growth, this weekend's likely stampede of shoppers south of the border will highlight the other challenges — a loonie near parity, more generous duty-free limits and more aggressive U.S. sale prices."
Sales rose 2.5 per cent at miscellaneous retailers, a category which includes used merchandise stores, office supply and stationery stores, and pet supply stores
General merchandise store sales decreased 0.7 per cent, with department store sales off 0.9 per cent.
Sales rose in five provinces in September led by Alberta, with sales off 0.7 per cent in Quebec and flat in Ontario.