Canadian Retail Sales (October 2024)

Retail sales enter the holiday season on a solid footing

• Retail sales rose by a solid 0.6% month-over-month (m/m) in October, slightly below Statistics Canada's advance estimate of 0.7% m/m. 
• In real terms, however, sales were unchanged.
• Sales at motor vehicle and parts dealers accelerated by 2.0% m/m, reversing September's losses. Ex-autos, sales were up 0.1% m/m, falling short of the consensus expectation of 0.4% m/m growth.
• Receipts at gas stations and fuel vendors declined by 0.2% m/m in nominal terms and by a sharper 4.7% m/m in real terms.
• Excluding both auto sales and gas station receipts, core retail sales rose by 0.2% m/m in October, following an upwardly revised increase of 1.6% m/m in September (previously reported as +1.4% m/m). 
• Core sales were supported by increases in miscellaneous store retailers (+1.5% m/m) and clothing and clothing accessories stores (+1.2% m/m), and furniture, home furnishings, electronics and appliances retailers (+0.3% m/m). However, declines in food and beverage stores (-0.7% m/m) offset some of these gains.
• E-commerce sales rose by 1.5% m/m, building on the 3.3% growth recorded in the previous month.
• Statistics Canada's advance estimate for November suggests that sales were unchanged.

Key Implications

• Canadians embraced the festive spirit in October, with spending gaining momentum as the official retail holiday season got underway. While the advance estimate for November suggests some softening, the GST holiday is expected to ring in stronger sales for December, giving retail cash registers a boost. 
• With inflation back at target, the three month average real retail sales per capita trend - a key indicator of purchasing power and consumer activity - posted growth for the second consecutive month. We forecast real personal consumption expenditure to grow at a tad above-trend pace of 1.9% annualized in Q4.    

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