Retail sales decreased 0.4% to $70 billion in December. Sales were down in three of nine subsectors, led by decreases at motor vehicle and parts dealers, reported Statistics Canada on Friday.
Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were down 0.3% in December. In volume terms, retail sales were unchanged in December, said the federal agency.
“Retail sales were up 0.1% in the fourth quarter of 2025, marking a seventh consecutive quarterly increase. In volume terms, retail sales decreased 0.3% in the fourth quarter. In 2025, retail sales increased 4.0%, led by gains at motor vehicle and parts dealers. In volume terms, sales were up 2.3% in 2025,” it said.
Statistics Canada said it is providing an advance estimate of retail sales, which suggests that sales increased 1.5% in January. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 59.8% of companies surveyed. The average final response rate for the survey over the previous 12 months was 87.7%, it explained.
Sales at motor vehicle and parts dealers fall, while sales at gasoline stations and fuel vendors rise
The largest decrease in retail sales in December was observed at motor vehicle and parts dealers (-1.6%), with all four store types within this subsector posting declines. New car dealers (-1.8%) led the decrease, falling for a second consecutive month. Lower sales were also recorded at used car dealers (-1.8%) in the month, said Statistics Canada.
The largest increase in retail sales in December came from gasoline stations and fuel vendors (+2.8%), which were up for a second consecutive month. In volume terms, sales at gasoline stations and fuel vendors rose 4.5% in December, it added.
Core retail sales fall
Following an increase of 1.5% in November, core retail sales fell 0.3% in December on lower sales at building material and garden equipment and supplies dealers (-4.0%). The decline in this subsector followed two consecutive monthly gains, explained Statistics Canada.
“Lower sales were also recorded at furniture, home furnishings, electronics and appliances retailers (-1.7%) in December. This decrease marks a second consecutive monthly decline for this subsector,” it said.
“The largest increase to core retail sales in December came from sporting goods, hobby, musical instrument, book, and miscellaneous retailers (+1.0%).”
On a seasonally adjusted basis, retail e-commerce sales increased 3.6% to $4.3 billion in December, accounting for 6.1% of total retail trade, compared with 5.8% in November, added the federal agency.
Retail sales in 2025
“Canadian retailers finished 2025 with $837.2 billion in sales, up 4.0% from 2024, and increases were observed in eight of the nine subsectors. Leading the gain in retail sales in 2025 were higher sales at motor vehicle and parts dealers (+4.7%), which were driven by gains at new car dealers (+3.7%). The sole decrease in retail sales in 2025 was observed at gasoline stations and fuel vendors (-2.7%), largely the result of lower gasoline prices in 2025 compared with 2024,” said the report.
“Core retail sales increased 4.7% in 2025, led by higher sales at general merchandise retailers (+4.6%) and health and personal care retailers (+6.7%). Sales were also up at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (+9.6%).”
Shelly Kaushik, Senior Economist, BMO Capital Markets, said: “December retail sales was a mixed bag, as the declines were concentrated in limited sectors and volumes were unchanged. However, a solid flash estimate points to a rebound to start the new year. Ultimately, consumer spending is holding in despite ongoing economic uncertainty.”
Andrew Grantham, Senior Economist, CIBC Capital Markets, said: “While December was a step backwards, that followed a healthy advance in the prior month and advance figures for January suggest a strong 1.5% gain in headline sales to start the New Year. For Q4 as a whole, real retail sales posted a modest decline. Underneath the volatility in monthly figures, the trend in inflation-adjusted sales still appears to be broadly sideways since the start of last year, and it will take a few more months of data to judge if the January figure is the start of a new uptrend.”
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