Canadian Retail Sales (April 2024)

Retail sales regain footing in April

• Retail sales rose by 0.7% month-on-month (m/m) in April, on par with the Statistics Canada's advanced estimate of a 0.7% increase. March's print was revised lower from  -0.2% m/m to -0.3% m/m.
• Adjusting for the impact of inflation, the volume of retail sales was up 0.5% m/m in April.
• Sales at motor vehicle and parts dealers (-2.2% m/m) declined for the first time in three months, while gasoline stations and fuel vendors registered a gain (+4.5% m/m) for the first time over the same time-period.
• Excluding auto sales and receipts at gas stations, core retail sales were 1.4% m/m higher in April –  a positive surprise to the consensus estimate of a 0.6% gain m/m. However, March's decline was revised lower by one notch to -0.7% m/m.
• The largest contributors to April's gains were sales at food and beverage stores (+1.9 % m/m), health and personal care stores (+1.9% m/m), and miscellaneous store retailers (+5.7% m/m).
• Receipts fell for building material & garden equipment dealers (-1.4% m/m) and sporting goods, hobby, book & music stores (-0.5% m/m).
• E-commerce sales were weaker on the month, contracting by 0.1% m/m following three months of strong growth of more than 2%.
• Statistics Canada's advanced estimate for May indicates a 0.6% m/m loss.

Key Implications

• Retail sales regained their footing in April after two consecutive months of decline, helping the second quarter start on a positive note. But, don't get too excited – the advanced reading for May takes the froth out of today's reading. The overall trend in spending points to softness, with the three-month average growth rate barely moving into positive territory in April, then reverting back in May.
  
• Recent industry data highlights sluggish demand in auto sales will spill over to the rest of the quarter, weighing on durable goods spending. Our internal data suggests that some vestiges of strength continue to linger in services spending, with travel picking up in May. Taking all trends into account, our quarter-on-quarter forecast for real personal expenditures is 0.7% (annualized) – quite a step down from 3.0% registered in Q1.               

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.