| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | -0.5% | -0.5% to -0.5% | -0.4% | 1.3% | 1.2% |
| Year over Year | 0.0% | 3.1% | 2.9% |
Highlights
Canadian retail sales contracted 0.4 percent in December, slightly less than the 0.5 percent decline expected by forecasters in an Econoday survey. Declines were concentrated in three sectors, led by motor vehicles and parts. Sales edged up just 0.1 percent in the fourth quarter.
Adjusting for the price effect, sales were flat in December, and down 0.3 percent over the quarter. In 2025, retail sales grew 4.0 percent, with volumes up 2.3 percent.
The advance estimate for January points to a 1.5 percent rebound fro December.
Excluding a 1.6 percent drop in motor vehicles and parts, sales managed to edge up 0.1 percent in December. But when also excluding a 2.8 percent gain in gasoline and fuel, core sales decreased 0.3 percent on the month after advancing 1.5 percent in November.
The Bank of Canada expects fourth quarter real GDP to stall, with negative contributions from net exports and inventories offsetting the positive contribution from final domestic demand.
With flat real sales in December, today's data are roughly in line with the Bank of Canada's expectation of a flat GDP, although the 0.3 percent retail sales decline over the quarter points to the possibility of a slightly disappointing household consumption performance.
In addition to motor vehicles and parts, housing-related categories also saw sales contracting: furniture, home furnishings, electronics and appliances were down 1.7 percent and building material and garden equipment and supplies down 4.0 percent.
Within core sales, the largest increase was in sporting goods, hobby, musical instrument, book, and miscellaneous, up 1.0 percent. Food and beverages were flat.
Regionally, declines were widespread across seven provinces, led by Alberta.
E-commerce sales increased 3.6 percent to C$4.3 billion in December, accounting for 6.1 percent of total retail trade, up from 5.8 percent in November.
Market Consensus Before Announcement
The consensus agrees with Stats Canada’s preliminary estimate at minus 0.5 percent on the month for January after the gain of 1.3 percent reported for December, led by food and beverage sales.
Definition
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are reported in cash terms and disaggregated into eleven main subsectors. Aggregate volume figures are also provided.
Description
With consumer spending a large part of the economy, market players continually monitor spending patterns. Data are available both for total retail sales and those excluding autos and for 16 different store specializations. Since autos account for over 25 percent of retail sales, the sector can have a pronounced impact on overall sales given their volatility. Retail sales are used to estimate the goods portion of personal consumer expenditures in the quarterly GDP accounts, accounting for about 50 percent of the total.
The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.