Retail Insider’s first edition of the Canadian Retail Monitor finds demand strengthened, with sales volumes rising faster than headline sales. Health, apparel and general merchandise led growth, while grocery weakened and e-commerce rebounded sharply.
"The problem going forward is that trade uncertainty is back with new U.S. tariffs now imposed, Canadian retaliation due early next month, and the prospect of further escalation hard to dismiss."
The monthly increase in May was concentrated in food and beverage retailers (+5,100; +1.0%), motor vehicle and parts dealers (+1,100; +0.5%) and general merchandise retailers (+1,000; +0.4%).
A new Cashew Research study finds Gen X shoppers are increasingly seeking international foods, but product discovery still happens primarily in-store, creating merchandising opportunities for grocery retailers.
Tourism spending in Canada (+0.1%) edged up in the first quarter of 2026, as increased spending by international visitors (+0.9%) more than offset lower tourism spending by Canadians in Canada (-0.2%).
Food inflation has exceeded Canada's overall inflation rate for 15 consecutive months under Prime Minister Mark Carney, highlighting ongoing affordability concerns for households.
Nearly half (48.8%) of businesses expect inflation to be an obstacle over the next three months, marking it as the most commonly expected obstacle among businesses.