(Feb 20): Canadian retail sales are on track to rebound to start the year after barely expanding in the fourth quarter. Receipts for retailers increased by 1.5% in January, according to an advanced estimate from Statistics Canada.
This follows tepid retail sales growth of 0.1% in the fourth quarter, and a 0.4% decline in December. Economists surveyed by Bloomberg were expecting retail sales declined by 0.5% during the last month of 2025.
Meanwhile, retail sales in volume terms were unchanged in December.
Despite US tariffs fuelling uncertainty in the Canadian economy, consumers continued to shop in 2025, with retail sales up 4% compared to 1.6% the previous year. Sales were up in eight out of nine subsectors. In volume terms, sales rose by 2.3% following a 0.9% increase in 2024.
Retail sales in 2025 were partly supported by a rush to buy cars at the start of the year, as consumers tried to get ahead of US tariffs. Car sales have since slowed down significantly, with motor vehicle and parts dealers experiencing the largest decline in retail sales in December.
See also: Eurozone business activity up on German manufacturing revival
Retail sales excluding motor vehicles and parts dealers were up 0.1% that month, versus economists’ expectations of a 0.1% decline.
Consumer confidence appears to be on an upswing this year. The Bloomberg Nanos Canadian Confidence Index registered 53.15 in the week ended Feb 13, up from 50.16 four weeks earlier, according to data released on Tuesday.
A reading above 50 indicates net positive views. The latest result marks the strongest level since November 2024.
See also: French business activity held back by manufacturing dip
While confidence remains well below the post-pandemic peak, the move suggests Canadians are feeling incrementally better about both their own finances and the broader economy.
This coincides with a moderation in shelter price inflation, which reached 1.7% in January, marking the first time the rate has fallen below 2% in nearly five years. The slowdown in shelter costs has been driven by easing rents and mortgage interest costs, as population growth stalls and the Bank of Canada holds its key interest rate at 2.25%.
Uploaded by Evelyn Chan
