Retail sales in Canada increased 1.0 per cent to $70.4 billion in August, driven by higher sales at motor vehicle and parts dealers, Statistics Canada reported Thursday.
The agency said sales were up in six of nine subsectors, with the largest gain recorded among motor vehicle and parts dealers, where sales rose 1.8 per cent for a third consecutive month. The increase was led by higher sales at new car dealers, up 2.3 per cent, and used car dealers, up 1.5 per cent.
Sales at gasoline stations and fuel vendors fell 2.0 per cent in August, marking the second consecutive monthly decrease. In volume terms, sales at these outlets dropped 2.6 per cent.
Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—increased 1.1 per cent in August, following a 1.2 per cent decline in July. Statistics Canada said the rise was “on higher receipts at general merchandise retailers (+2.4%).”
Higher sales were also reported at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers, which were up 3.2 per cent in August. The largest decline in core retail sales came from building material and garden equipment and supplies dealers, where sales decreased 0.3 per cent.
Retail sales increased in five provinces during the month. The largest provincial gain in dollar terms was in Ontario, where sales rose 1.2 per cent on higher receipts at motor vehicle and parts dealers. In the Toronto census metropolitan area, sales were up 2.4 per cent.
In Quebec, retail sales rose 1.8 per cent in August, marking the third straight monthly increase. In the Montréal census metropolitan area, sales increased 2.3 per cent. Nova Scotia saw the largest provincial decline, with sales down 0.5 per cent, led by lower sales at motor vehicle and parts dealers.
On a seasonally adjusted basis, retail e-commerce sales increased 0.1 per cent to $4.3 billion in August, accounting for 6.1 per cent of total retail trade, compared with 6.2 per cent in July.
Statistics Canada also provided an advance estimate suggesting retail sales decreased 0.7 per cent in September. The agency noted that “owing to its early nature, this figure will be revised.” The advance estimate was based on responses from 48.4 per cent of companies surveyed, compared with an average final response rate of 89.3 per cent over the previous 12 months.
“Canadian retail sales have seen plenty of ups and downs this year, but through the volatility sales volumes have had little upward momentum. If the third quarter ends on a sour note, as the advance estimate suggests, then sales volumes for the quarter as a whole will be little changed relative to Q2, pointing to a re-weakening of overall consumer spending. That would justify the further 25bp interest rate cut that we expect from the Bank of Canada next week,” said Andrew Grantham, Senior Economist, CIBC Capital Markets.
Maria Solovieva, Economist, TD, said: “Retail sales data continues to exhibit volatility, with monthly figures alternating between declines and gains.
“As a result, nominal sales are currently tracking at an annualized rate of 1.2% for the quarter. The composition suggests that consumers favoured discretionary retail spending. At the same time, our internal data on credit and debit card spending shows relatively healthy gains in discretionary services categories such as travel, which rebounded sharply in Q3 after contracting in the previous quarter. Although part of this strength likely reflects higher prices.
“Taken together, the notable slow-down in durable goods spending, particularly autos, suggests real personal spending growth should drift to a below trend rate in the second half of 2025. This should give the Bank of Canada further reason to emphasize economic slack, despite September’s unexpected uptick in inflation.”
More from Retail Insider:
