Canada's Retail Sales Dip Slightly in January

Canadian retail sales experienced a slight decrease in January, contracting by -0.3% month-over-month to reach CAD 67.0 billion. This decline was less severe than market expectations, which had anticipated a -0.4% drop. Notably, this downturn in retail activity was not widespread but concentrated in specific sectors.

Subsector Performance

Sales contracted in three out of nine subsectors, with motor vehicle and parts dealers witnessing the most significant decline, falling -2.4% month-over-month. This drop in auto-related retail points to a cooling demand or potential inventory adjustments within this segment.

Core Retail Sales Rise

Excluding the more volatile categories of gasoline stations, fuel vendors, and motor vehicle and parts dealers, core retail sales actually displayed resilience, posting a 0.4% month-over-month increase. This suggests that the broader retail sector, outside of the specified subsectors, continues to show consumer engagement and spending activity.

Volume Increase and Future Projections

When evaluated in terms of volume, rather than purely monetary terms, retail sales experienced a 0.2% month-over-month uplift, indicating that even with pricing fluctuations, the quantity of goods sold also rose. Looking ahead, preliminary data for February suggests that retail sales could see a 0.1% month-over-month escalation, signaling a possible return to positive growth territory shortly after the January setback.

Retail, Economy, Canada