Canadian retail sales decreased 1.4 per cent to $65.3 billion in March, reported Statistics Canada on Friday.

The federal agency said sales decreased in five of the nine subsectors, representing 55.5 per cent of retail trade, led by decreases at motor vehicle and parts dealers (-4.4 per cent) and gasoline stations and fuel vendors (-3.9 per cent).

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“Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—increased 0.3 per cent in March. In volume terms, retail sales decreased 1.0 per cent in March. Retail sales were up 0.7 per cent in the first quarter of 2023. In volume terms, retail sales were up 1.2 per cent,” it said.

“Statistics Canada is providing an advance estimate of retail sales, which suggests that sales increased 0.2 per cent in April. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 38.2 per cent of companies surveyed. The average final response rate for the survey over the previous 12 months was 89.4 per cent.”

In March, retail sales decreased in nine provinces in March. Ontario (-1.7 per cent) had the largest provincial decrease, led by lower sales at motor vehicle and parts dealers. In the census metropolitan area (CMA) of Toronto, retail sales were down 1.2 per cent. In New Brunswick, retail sales decreased 10.7 per cent, led by lower sales at motor vehicle and parts dealers. British Columbia (+0.9 per cent ) was the only province to record an increase in retail sales. The increase was driven by higher sales at motor vehicle and parts dealers. In the CMA of Vancouver, retail sales were up 2.0 per cent, added StatsCan.

“On a seasonally adjusted basis, retail e-commerce sales in March were up 2.2 per cent to $3.8 billion, accounting for 5.9 per cent of total retail trade, compared with 5.7 per cent in February,” said the report.

Andrew Grantham, an economist with CIBC Economics, said a decline in March retail sales, and only partial rebound in April, suggests that the Canadian consumer may be finally starting to crack under the pressure of higher interest rates.
“Although spending on services is likely to be firmer, a softer trend in retail sales is a sign that perhaps the Bank of Canada simply needs more patience, rather than more interest rate hikes, in its quest to bring inflation back down to target,” he said.
Shelly Kaushik, Economist with BMO Economics, said consumer spending looks to be losing momentum heading into Q2.

Mario Toneguzzi

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)

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