Canadian retail sales edged up 0.3% in April, Statistics Canada reported Friday, with gains in auto sales and online shopping helping push total sales past $70 billion. But the increase, spread across just six of nine sectors, came in slightly below forecasts.
The strongest gains came from motor vehicle and parts dealers (+1.9%), sporting goods, hobby, musical instrument and miscellaneous retailers (+1.0%) and home furnishings, electronics and appliances retailers (+0.4%).
Notable decreases for April were recorded at gasoline stations and fuel vendors (-2.7%) and clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (-2.2%).
Core retail sales—which exclude gas stations and motor vehicle and parts dealers—edged up just 0.1% in April, down from a 0.2% gain the month before. However, in volume terms, retail sales jumped 0.9%, pointing to stronger underlying demand.
Regionally, retail sales rose in just five provinces, with Saskatchewan (+2.0%) and British Columbia (+1.7%) posting the strongest gains. New Brunswick saw the steepest decline, down 3.1% in April, largely due to weaker motor vehicle and parts sales.
Online shopping also recorded a healthy increase for April, increasing 3.2% to $4.4 billion, representing 6.2% of Canada’s total retail trade.
Trade concerns cast shadow over second-quarter outlook
Though April’s data points to a rebound in consumer spending—driven largely by early auto purchases ahead of anticipated price hikes—signs of a pullback are already emerging. StatCan’s flash estimate for May suggests a sharp 1.1% decline, as auto sales retreat and consumer sentiment turns more cautious.
“Looking through the tariff- and gas price-driven swings, the retail sales report points to slowing consumer spending through the spring,” wrote BMO’s Shelly Kaushik. “The weak flash estimate for May, even if largely auto-driven, is consistent with our view that the economy struggled in the second quarter.”
Economists expect consumer spending to weaken in the coming months, with 36% of retailers reporting trade-related impacts in April, including price increases, shifting demand and supply chain disruptions.
These tariff-related concerns had a noticeable impact, with all nine retail subsectors reporting negative effects on sales—even among those that posted overall monthly gains, StatCan said.
TD Economics’ Maria Solovieva also flagged weakening consumer activity, pointing to TD’s internal credit and debit card data, which showed a clear pullback in spending through May.
“The advance estimate sets a somber tone for the second quarter,” she wrote. “In addition, our internal credit and debit card spending data shows a meaningful softening in spending through May, suggesting that consumers tightened their purse strings.
Solovieva added that TD now expects real personal consumption to be flat in Q2, with a potential contraction in Q3 if U.S. tariffs continue to weigh on sentiment and job prospects.
National Bank economist Daren King also sees retail sales weakening in the months ahead, though he points to additional factors, including the impact of wildfires across the country. He noted that the Liberals’ proposed summer tax cut could help “soften the blow,” but underlying concerns remain.
“As a result, a slowdown in consumption remains our base scenario for the coming months,” he said.
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Last modified: June 20, 2025