Retail sales increased 1.2% to $74.6 billion in August. Sales were up in all nine subsectors, led by increases at motor vehicle and parts dealers. Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were up 1.1% in August. In volume terms, retail sales increased 1.2% in August, reported Statistics Canada on Friday.
On a seasonally adjusted basis, retail e-commerce sales increased 1.1% to $5.6 billion in August, accounting for 7.6% of total retail trade, it said. Statistics Canada also provided an advance estimate of retail sales, which suggests that sales increased 0.7% in September. O
“The largest increase in retail sales in August was observed at motor vehicle and parts dealers (+1.2%). The increase was led by higher sales at new car dealers, up 1.5% in August after decreasing 1.4% in July. In August, gains at automotive parts, accessories and tire retailers (+1.4%) were offset by lower sales at other motor vehicle dealers (-1.4%) and used car dealers (-0.5%),” said the federal agency.
“Sales at gasoline stations and fuel vendors increased 1.7% in August, up for the first time in three months. In volume terms, sales at gasoline stations and fuel vendors decreased 0.5%.”
Core retail sales rise
Statistics Canada said core retail sales rose 1.1% in August, following a decrease of 0.7% in July. The increase in August was led by higher sales at the food and beverage retailers subsector (+1.1%), which posted its first increase in three months. All four store types within this subsector were up in August.
In August, higher sales were also recorded at general merchandise retailers (+1.0%) after a decline of 1.7% in July. Sales at health and personal care retailers were up 1.6% in August, rising for a 10th consecutive month, it added.
Sales up in six provinces
“Retail sales increased in six provinces in August. The largest provincial increase in dollar terms was observed in Ontario (+2.2%), led by higher sales at motor vehicle and parts dealers. In the census metropolitan area (CMA) of Toronto, retail sales increased 4.0%. In British Columbia, retail sales were up 2.1% in August, led by higher sales at motor vehicle and parts dealers. In the CMA of Vancouver, sales were up 2.1%,” said the report.
“The largest provincial decrease in retail sales in August was observed in Alberta (-0.1%). This decline was led by lower sales at motor vehicle and parts dealers.”
Economist comments
Katherine Judge, Senior Economist, CIBC Capital Markets, said: “Part of the acceleration in Q3 real retail sales owes to a strong handoff from Q2, when FIFA World Cup spending and government stimulus cheques were supporting spending. The weak end to Q3 in volume terms suggested by the advance estimate isn’t a good sign for Q4 spending, with elevated gasoline prices still eating into discretionary spending power at a time when the labour market is under pressure due to trade uncertainty.”
Maria Solovieva, Economist, TD Economics, said: “August’s solid rebound, coupled with September’s encouraging flash estimate, put Q3 retail sales on track to grow by 4.0% in nominal terms (quarter-on-quarter, annualized). This is consistent with our internal TD Spend data, which points to firm spending on both goods and services.
“Today’s report reinforces our view that Canadian households retain the capacity to spend, supported by accumulated wealth and resilient income growth. The latest Canadian Survey of Consumer Expectations offers a similar, albeit mixed, signal: consumers’ perceptions of their financial health improved, even as spending intentions weakened. Putting greater emphasis on the hard data, we expect real personal consumption expenditure to grow by 2.6% annualized in Q3 2026. From there, consumers are likely to take spending down a notch, with growth expected to moderate toward year-end.”
Shelly Kaushik, Vice-President, Senior Economist, BMO Capital Markets, said: “A firm retail sales report for August highlights consumer resilience amid ongoing uncertainty. But, a softer September points to ebbing momentum heading into Q4.”
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