Canadian Retail Sales (April 2026)

Retail sales rise in April as higher prices support sales.

• Retail sales rose 0.5% month-on-month (m/m) in April, a touch below Statistics Canada’s advance estimate for a 0.6% increase.
• In volume terms, retail activity was unchanged, suggesting that higher prices remained the primary driver of headline sales growth.
• Motor vehicle and parts dealers posted a 1.7% m/m increase, driven by higher sales at new car dealers (+1.8% m/m), marking a fourth consecutive monthly gain.
• Receipts at gasoline stations and fuel vendors rose 5.1% m/m. While part of the increase reflected higher energy prices, sales volumes rose 0.8% m/m, pointing to modest underlying demand.
• Core retail sales (excluding autos and gasoline) posted a second consecutive monthly decline, falling 0.7% m/m after a 0.1% m/m decline in March.
• Weakness was concentrated in food and beverage stores (-2.0% m/m), and general merchandise retailers (-1.7% m/m). Partially offsetting these declines was a strong gain at building material and garden equipment dealers (+3.3% m/m).
• Retail e-commerce sales declined 1.2% m/m in April.
• Statistics Canada’s advance estimate points to a 1.0% m/m increase in May.
  
   

Key Implications

• April’s report suggests that inflation continued to support nominal retail sales, while underlying demand remained subdued. Core retail sales contracted for a second consecutive month, indicating that consumers are becoming more selective in their spending as higher energy prices continue to eat into household budgets. 
• With higher energy prices weighing on purchasing power through much of the quarter, we expect consumer spending growth to moderate to a +0.5% q/q annualized pace in Q2, following the more robust +1.5% recorded in Q1 (see QEF). Energy prices have begun to retreat in June, which should provide some relief to household budgets and help support a firmer pace of private domestic demand in the second half of 2026.

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