Canadian Retail Sales (March 2025)
Marc Ercolao, Economist | 416-983-0686
Date Published: May 23, 2025
- Category:
- Canada
- Data Commentary
- Consumer
Retail sales bounced back in March
- Retail sales saw their first increase in 2025, up 0.8% month-on-month (m/m) in March, a tick above Statistics Canada's advanced estimate. After adjusting for inflation, the volume of retail sales posted a 0.9% m/m increase.
- For the first quarter, retail sales volumes saw mild growth (+0.2% quarter-on-quarter, q/q) after two quarters of relatively strong gains.
- Motor vehicles and parts sales (4.8% m/m) contributed most to the headline print, reversing the decline from the two months prior.
- Lower crude oil prices in March drove a -6.5% m/m decline in receipts at gas stations and fuel vendors (-2.6% m/m on a price-adjusted basis).
- Excluding auto sales and receipts at gas stations, core retail sales increased for a second consecutive month (0.2% m/m), driven primarily by higher sales of building materials (+2.6% m/m) and clothing/jewelry/leather goods (+2.6% m/m). A -2.7% m/m pullback from general merchandise retailers tempered core retail gains.
- E-commerce sales fell 2.1% m/m in March.
- Statistics Canada's advanced estimate for April points to a 0.5% m/m rebound.
Key Implications
- March retail sales data came in a bit warmer than expected. Consumers pulled forward their auto purchases, something we expected as buyers front-ran counter tariffs imposed in April. The surprise was in the 5 of 7 non-auto retail components that advanced on the month, which may represent stockpiling of non-discretionary items ahead of other incoming tariffs.
- Expectations for another solid month of sales growth in April may offer some positive momentum for total consumer spending into the second quarter, though we expect spending weakness to dominate the broader trend. Canadian consumer confidence has nosedived in recent months and the labour market has started to shed jobs. Against this backdrop, we expect consumers to stay relatively hesitant until confidence and clarity are restored, which we think will occur in the later stages of this year. A few more Bank of Canada rate cuts in the coming months may help soften the blow.
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