Canadian Retail Sales (May 2026)

Retail sales rise in May as real activity rebounds.

• Retail sales rose 1.0% month-on-month (m/m) in May, in line with Statistics Canada’s advance estimate.
• In volume terms, retail trade was up 0.3% m/m, pointing to a rebound in underlying demand. 
• Motor vehicle and parts dealers posted a 0.7% m/m increase, driven by higher sales at new car dealers (+0.5% m/m). 
• Receipts at gasoline stations and fuel vendors rose 3.1% m/m, however volumes fell 0.7% m/m, suggesting the headline gain was largely driven by prices.
• Core retail sales (excluding autos and gasoline) rebounded after two consecutive monthly declines, rising 0.9% m/m. All major categories posted gains, but the advance was driven by a 1.0% m/m rise at general merchandise stores.
• Retail e-commerce sales declined 1.5% m/m in May.
• Statistics Canada’s advance estimate points to a 0.4% m/m increase in June.
   

Key Implications

• May delivered a solid month for retail sales, with core spending and real activity rebounding after two consecutive monthly declines. While Statistics Canada’s advance estimate points to slower nominal sales growth in June, last month’s fall in consumer prices suggests this mostly reflects a price effect and not weaker demand. Our internal TD Spend data reinforces that view, with services spending continuing to strengthen in June, supported by FIFA-related activity and recent federal government income support measures. Taken together, this points to a stronger outlook for real personal consumption growth in Q2 than currently embedded in our forecast.
• The durability of this experience remains an open question. Oil prices have resumed their climb this morning and, while they remain below the highs reached in April, they still represent an incremental tax on household purchasing power, particularly for lower-income consumers.
  
   

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.