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Canadian Retail Sales (April 2025)

Maria Solovieva, CFA, Economist | 416-380-1195 

Date Published: June 20, 2025

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Retail sales rise in April but Q2 outlook remains murky

  • Retail sales edged up 0.3% in April month-on-month (m/m), slightly below the Statistics Canada's advanced estimate.
  • After adjusting for inflation, the volume of retail sales increased 0.5% m/m.
  • For the second straight month, strength in motor vehicles and parts sales (+1.9% m/m) was the primary driver of headline growth. Ex-autos, sales were down 0.3% m/m.
  • Receipts at gas stations and fuel vendors plunged by -2.7% as gas prices tumbled 18.1% as the consumer carbon tax ended.
  • Excluding auto sales and receipts at gas stations, core retail sales edged up by 0.1% m/m. The marginal increase was supported by strong growth at miscellaneous store retailers (+2.0% m/m).  Most other categories either made minimal contributions or weighed on overall sales.
  • E-commerce sales rose by 3.6% m/m in April. 
  • Statistics Canada's advanced estimate points to a 1.1% m/m contraction in May.

Key Implications

  • As expected, consumers continued front-load vehicle purchases in anticipation of price increases that are likely to come due to tariffs. However, core sales may be an early signal of broader consumer hesitancy in the face of trade policy headwinds. According to a supplementary by Statistics Canada survey, 36% of retail businesses reported being affected by trade tensions in April. The most commonly cited impact included price increases, change in demand, and supply chain disruptions. 
  • The advance estimate sets a somber tone for the second quarter. 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.  As a result, we expect real personal consumption expenditures to be flat this quarter, with consumer spending likely to contract in Q3 if U.S. tariffs continues to weigh on sentiment and job prospects.    

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