Retail sales increased 0.5% to $73.0 billion in April. Sales were up in five of nine subsectors, led by increases at gasoline stations and fuel vendors, reported Statistics Canada on Friday.
Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were down 0.7% in April. In volume terms, retail sales were unchanged in April, said the federal agency.
Statistics Canada also provided an advance estimate of retail sales, which suggests that sales increased 1.0% in May.
The largest increase in retail sales in April was observed at gasoline stations and fuel vendors (+5.1%). In volume terms, sales at gasoline stations and fuel vendors rose 0.8% in April, noted Statistics Canada.
“Following a decline of 0.1% in March, sales at motor vehicle and parts dealers were up 1.7% in April. The increase was led by sales at new car dealers (+1.8%), which posted a fourth consecutive monthly gain. Sales were also up at used car dealers (+5.1%) in April after recording a decline of 4.2% in March,” it said.
Core retail sales fell 0.7% in April, posting their second consecutive monthly decline. The decrease was led by lower sales at food and beverage retailers (-2.0%) and general merchandise retailers (-1.7%). In April, sales also declined at sporting goods, hobby, musical instrument, book, and miscellaneous retailers (-1.5%), down for a second consecutive month. The largest increase in core retail sales came from building material and garden equipment and supplies dealers, which increased 3.3% in April after decreasing 4.5% in March, explained Statistics Canada.
The report said retail sales increased in six provinces in April and the largest provincial increase in dollar terms was observed in Ontario (+0.5%), led by higher sales at motor vehicle and parts dealers. In the census metropolitan area of Toronto, retail sales fell 1.0%.
In Alberta, retail sales were up 1.3% in April on higher sales at gasoline stations and fuel dealers. The largest provincial decrease in retail sales in April was observed in Manitoba (-1.8%). This decrease was led by lower sales at motor vehicle and parts dealers, added the federal agency.
On a seasonally adjusted basis, retail e-commerce sales decreased 1.2% to $5.1 billion in April, accounting for 7.0% of total retail trade, compared with 7.1% in March.
Maria Solovieva, Economist, TD, said: “April’s report suggests that inflation continued to support nominal retail sales, while underlying demand remained subdued. Core retail sales contracted for a second consecutive month, indicating that consumers are becoming more selective in their spending as higher energy prices continue to eat into household budgets.
“With higher energy prices weighing on purchasing power through much of the quarter, we expect consumer spending growth to moderate to a +0.5% q/q annualized pace in Q2, following the more robust +1.5% recorded in Q1. Energy prices have begun to retreat in June, which should provide some relief to household budgets and help support a firmer pace of private domestic demand in the second half of 2026
“Today’s data provided further evidence that high gasoline prices were cutting into households’ ability to spend in other areas over the spring. While headline retail sales posted a seemingly solid 0.5% gain in April (consensus 0.6%), that nominal figure was flattered by higher gasoline prices. Core sales (ex auto and gasoline) fell 0.7% on the month, while overall sales volumes were unchanged. As well as the partly price-driven increase at gasoline stations, auto sales also rose on the month, as did sales at building material stores. Acting as an offset, food & beverage, general merchandise and sporting goods retailers all saw declines in sales. The advance estimate for May pointed to a 1% increase in headline nominal sales, although with gasoline prices rising during that month as well, that figure will also look softer in volume terms,” said Andrew Grantham, Senior Economist, CIBC Capital Markets.
“Overall, the volume of consumer goods spending appears to be stalling in the second quarter following a strong start to the year, with high pump prices cutting into household spending on more discretionary items. However, the recent decline in gasoline prices, combined with expanded household benefits paid by the Federal government, should support a pick-up in spending again during the second half of the year. “
Shelly Kaushik, Senior Economist, BMO Capital Markets, said: “Canadian consumers are hanging in through the energy price shock by pulling back on spending for other items. As prices start to normalize, we expect to see consumer spending recover through the rest of the year.”
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