Canadian consumers have plenty of reasons to cut back. The labour market is weakening, household debt remains high and the trade dispute with the United States is adding another layer of uncertainty for businesses and households.
They are still spending.
Recent results from some of North America’s largest retailers show Canadian sales holding up well and, in several cases, growing faster than comparable U.S. businesses. Walmart Canada has recently outpaced Walmart U.S. on sales growth. TJX Canada, which operates Winners, Marshalls and HomeSense, continues to post strong comparable sales. Home Depot has also identified Canada as an outperforming market.
The results do not show that Canadian households are financially stronger than Americans. They point to consumers who remain active despite a difficult economic backdrop, with value playing a larger role in where money gets spent.
Walmart Canada Picks Up Pace
Walmart Canada generated US$6.38 billion in net sales during the quarter ended July 31, up 4.3 per cent from a year earlier. Walmart U.S. sales rose 3.5 per cent over the same period.
The gap is wider over the first six months of Walmart’s fiscal year. Canadian sales reached US$12.1 billion, up 7.5 per cent from a year earlier. Walmart U.S. sales increased about 4 per cent.
The U.S. business is also slowing on a comparable-sales basis. Walmart U.S. comparable sales excluding fuel increased 2.6 per cent in the second quarter, down from 4.6 per cent a year earlier.
There is an important qualification. Walmart reports its Canadian sales in U.S. dollars, which means exchange rates affect the year-over-year comparison. The company does not provide a separate constant-currency net-sales figure for Canada.
Even with that limitation, the direction of the Canadian business is worth watching. Walmart Canada grew more slowly than Walmart U.S. in the previous fiscal year. That relative performance has since reversed.
Walmart’s results alone would provide limited evidence of a broader shift in consumer behaviour. Results elsewhere make the comparison more significant.
Winners, Marshalls and HomeSense Run Ahead
TJX provides a cleaner comparison because the company reports comparable sales separately for Canada and its U.S. divisions.
TJX Canada posted a 6 per cent comparable-sales increase in its latest quarter. Comparable sales at Marmaxx, the U.S. division that includes T.J. Maxx, Marshalls and Sierra, increased 1 per cent.
Canadian net sales reached US$1.47 billion, up 6 per cent as reported and 8 per cent at constant currency. Comparable sales in Canada were up 7 per cent over the first half of the year.
The source of that growth matters. TJX said increases in customer transactions and average basket drove Canadian comparable sales. Customers are visiting more often and spending more when they do.
Canada was already one of TJX’s stronger markets. Canadian comparable sales increased 9 per cent in the same quarter last year, compared with 3 per cent at Marmaxx.
The comparison still needs context. Marmaxx had a weak second quarter, while HomeGoods in the U.S. posted a 7 per cent comparable-sales increase. TJX Canada’s results are strong, but format and category remain important alongside geography.
Home Depot Adds Another Category
Home Depot broadens the picture beyond off-price and general merchandise retail.
Company-wide comparable sales increased 1.7 per cent in its latest quarter, while U.S. comparable sales rose 1.3 per cent. Management said Canada and Mexico performed above the company average and pointed to improving Canadian results.
The retailer also reported positive comparable growth in Canadian transactions and units during the first half.
That is useful context given the state of Canadian housing. Affordability remains difficult and residential activity has been uneven, yet consumers have continued spending on home improvement.
Costco Shows How Quickly the Picture Can Change
Costco provides the strongest reason to avoid declaring a broad Canadian victory over the U.S. consumer.
During the company’s fiscal third quarter, reported comparable sales increased 10.7 per cent in Canada and 9.4 per cent in the United States. After gasoline and foreign exchange were removed, Canada grew 6.2 per cent compared with 6.8 per cent in the U.S. Over the first 36 weeks of the fiscal year, adjusted Canadian comparable sales remained ahead at 7.6 per cent versus 6.4 per cent.
The advantage disappeared over the summer.
Adjusted Canadian comparable sales increased 4.9 per cent in June and July, trailing the U.S. in both months. In August, adjusted Canadian growth slowed further to 2.8 per cent, compared with 5.6 per cent in the United States.
For Costco’s full fiscal year, the two markets finished almost even. Adjusted comparable sales increased 6.7 per cent in Canada and 6.6 per cent in the U.S.
Costco’s results make the broader point clear. Canadian consumers performed strongly through much of 2026, but the evidence does not support a blanket conclusion that they are outperforming Americans across retail.
Retail Sales Show Consumers Are Still Buying
Broader Canadian spending data support the retailer results.
Retail sales increased 0.6 per cent in June to $74.3 billion. Core retail sales, which exclude motor vehicles and gasoline, increased 1.2 per cent. General merchandise sales rose 2.7 per cent, while clothing, accessories, footwear and jewellery increased 3.1 per cent.
Toronto recorded a particularly strong month, with retail sales rising 3.9 per cent.
The volume number is also important. Retail sales increased 1.5 per cent in volume terms, meaning higher prices alone did not account for the gain. Retail e-commerce sales increased 9.9 per cent month over month to $5.7 billion.
Household spending also contributed to Canadian economic growth during the second quarter. Real GDP increased 0.8 per cent from the previous quarter, with household consumption increasing by the same amount.
Disposable income rose faster than nominal household spending during the quarter, although government transfers, including a one-time GST/HST credit top-up, contributed to the income gain.
The figures show household demand remained firm through the second quarter. They do not show consumers free of financial pressure.
The Labour Market Says Something Else
Employment is the clearest risk. Canada lost approximately 42,000 jobs in August and the unemployment rate remained at 6.4 per cent. Average hourly wage growth slowed to about 2 per cent year over year.
The August decline followed several stronger months, so one monthly report does not establish a sustained employment contraction. The direction of the labour market nevertheless matters for retailers.
Consumers can remain cautious about the economy while continuing to shop. Sustained job losses are harder for household budgets to absorb.
Trade uncertainty creates another source of pressure. Tariffs and counter-tariffs move through supply chains at different speeds, affecting costs, sourcing decisions, pricing and margins before the full impact reaches consumers.
Value Retailers Are Winning
The retailers producing some of Canada’s stronger results provide a clue about where consumers are directing their money.
Walmart, Winners, Marshalls, HomeSense, Dollarama and Costco have different formats, but price and perceived value are central to each business.
Dollarama’s Canadian comparable sales increased 5.6 per cent in its most recently reported quarter. TJX Canada is producing higher transactions and basket sizes. Walmart competes heavily on price across grocery and general merchandise.
The evidence does not prove that Canadian spending strength is being driven by a wholesale shift toward value retailers. It does show that companies with strong value propositions are capturing meaningful spending.
Consumers are choosing where to spend, where to trade down and which purchases can wait.
For retailers, that leaves less room for weak assortments, unclear positioning or prices customers cannot justify.
The Fall Will Be a Harder Test
There are already signs that momentum could be slowing.
Statistics Canada’s advance estimate indicates retail sales fell 0.8 per cent in July after the strong June result. The estimate is preliminary and was based on responses from 56.5 per cent of companies surveyed, making the final July data important to watch.
Costco provides a more current warning. Its adjusted Canadian comparable-sales growth fell to 2.8 per cent in August after reaching 4.9 per cent in both June and July. U.S. growth was stronger throughout the three-month period.
Employment remains the bigger concern. If weakness persists, pressure will eventually reach discretionary spending.
The trade dispute adds another variable. Retailers and suppliers can absorb some tariff-related costs, change sourcing, adjust promotions or raise prices, but each response affects either margins or consumers.
The next few months should provide a clearer read on how much spending strength remains.
Retailers Still Have Reasons to Invest in Canada
Canada’s difficult economic headlines have not brought retail expansion to a halt.
TJX continues to see room for store growth, Walmart is investing in its Canadian operations and Dollarama continues to add locations. Home Depot has also identified Canada as a strong market.
Retailers make real estate decisions using store economics alongside national economic indicators. Sales productivity, traffic, occupancy costs, available locations, competition and population trends determine whether another store makes financial sense.
For landlords and leasing teams, that distinction matters. Cautious consumers can still produce strong stores, particularly for retailers that are taking market share or giving customers a clear reason to visit.
There is no guarantee Canadian consumer spending holds up through the rest of 2026. Employment has weakened, Costco’s latest Canadian numbers have slowed and the full effects of the trade dispute have yet to work through household budgets.
The performance to date is still notable. Consumers kept spending through a period when the economic backdrop suggested a sharper pullback was possible, and several large retailers recorded strong Canadian results along the way.
For retailers, the bigger issue is where the money is going. Canadian consumers have become harder to win over, and value appears to be carrying more weight in their decisions.
The fall will show how durable that spending really is.
