(Toronto; Feb. 21, 2002; CNW) Retailers in Canada have experienced a better than expected start to the year, with many merchants ringing up higher sales during the first seven weeks of 2002 than the comparable period a year ago.

"The retail sector in our country - and indeed around the world - is in a very challenging period, as recent media reports have indicated," said Diane J. Brisebois, President and CEO of Retail Council of Canada. "In spite of these challenges, most of our members are telling us that their customers are still in the mood to shop. Despite weaknesses in certain parts of the economy, the overall level of consumer confidence remains positive."

Key to this consumer resilience is Canada's stable workforce and higher than expected job creation, as well as last year's drop in interest rates, which made the cost of borrowing more affordable. This in turn has spurred demand for housing, home furnishings and other big-ticket purchases. Tax cuts have been another contributing factor, although Retail Council of Canada believes further cuts are needed to sustain consumer confidence over the longer term.

Ms. Brisebois added: "While some merchants are still coming to grips with the rigours and realities of today's competitive marketplace, most retailers we have contacted are saying they are pleased - and a bit surprised - to report their sales to date this year are running slightly ahead of a year ago. The story is consistent throughout the country and across a variety of merchandise categories, price points and store formats. Many retailers now believe that their sales in 2002 will be a little better than they originally thought they would be."

The encouraging results to date and the generally positive outlook for 2002 come as Statistics Canada reported today that retail sales in 2001 reached $289.5 billion, up 4.5% from the year before. Sales in December were $25 billion, up 5.8% from December 2000. The December gains are even better than Retail Council of Canada's forecast for the holiday sales period.

Retail Council of Canada (www.retailcouncil.org) represents an industry that employs more than 1.7 million Canadians. The association's 8,500 members include national and regional chains, big-box and specialty stores, independent retailers and online merchants. More than 90% of members are independent owner/operators.