| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 1.0% | 1.0% to 1.3% | 1.0% | 0.5% | 0.4% |
| Year over Year | 5.9% | 3.7% | 3.6% |
Highlights
As expected, retail sales expanded 1.0 percent in May from April, the largest gain since January 2026, for a 12-month increase of 5.9 percent. Most the the monthy gain was price related, as volumes expanded just 0.3 percent.
Core retail sales, excluding gasoline fuel vendors and motor vehicle and parts, were up 0.9 percent in May. While a 3.1 percent gain in gasoline and fuel lifted sales (2.7 percent in volume), the small difference between total and core sales illustrates the widespread nature of gains across sectors.
Preliminary data point to a slowdown to 0.4 percent in June, when the inflation rate eased to 2.8 percent from 3.2 percent in May. Excluding gasoline, the inflation rate was steady at 2.2 percent.
Today's report supports the Bank of Canada's expectation of a GDP recovery after two quarters of contraction, although consumption growth is projected to continue to slow through the end of this year, with the population starting to gro again - albeit modestly - in the third quarter of this year after three quarters of decline. Also supporting the case for modest consumption growth, the Q2 BoC Canadian Survey of Consumer Expectations released July 6 found that"concerns about high prices and economic uncertainty are still holding back consumer spending plans."
In June, sales of motor vehicles and parts were up 0.7 percent. Excluding this sector, sales increased 1.2 percent on the month.
Housing-related sales also grew on the month, with building material and garden equipment and supplies up 0.9 percent and furniture, home furnishings, electronics and appliances up 0.6 percent.
Food and beverages rose 0.5 percent, as a 1.0 percent increase in supermarkets and other grocery retailers' sales offset declines in other subcategories.
Regionally, sales increased in nine provinces, led by a 2.1 percent gain in British Columbia. Nova Scotia was the only province to record a decline (minus 0.8 percent).
E-commerce contracted in 1.5 percent in May, accounting for 6.8 percent of total retail trade, down from 7.0 percent in April.
Market Consensus Before Announcement
The consensus agrees with the Statistics Canada preliminary estimate that sees sales up 1.0 percent in May after a 0.5 percent increase in April.
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.