Canada’s retail sales rose 1.0% mom to CAD 73.7B in May, marking a broad-based improvement in consumer spending as all nine retail subsectors posted gains. The increase was led by gasoline stations and fuel vendors, reflecting higher fuel prices, while motor vehicle and parts dealers also contributed with a second consecutive monthly increase. Excluding the more volatile gasoline and auto categories, core retail sales still advanced a solid 0.9%, suggesting household demand remained resilient beyond energy-related spending.
The composition of the report painted a slightly more nuanced picture. Sales at gasoline stations and fuel vendors rose 3.1% in value terms, but volumes fell -2.7%, indicating that higher prices rather than stronger demand drove much of the increase. Meanwhile, motor vehicle and parts dealers recorded a 0.7% gain, with new car dealers leading the advance. Overall retail sales volumes rose 0.3%, pointing to modest but positive growth in the quantity of goods purchased after adjusting for price changes.
The outlook also remained constructive. Statistics Canada’s advance estimate suggests retail sales increased a further 0.4% in June, indicating consumer spending continued to expand heading into the second quarter’s close.
Economic Data
| Indicator | Actual | Expected | Previous |
|---|---|---|---|
| Retail Sales (May, m/m) | +1.0% | +0.7% | +0.3% |
| Core Retail Sales (May, m/m) | +0.9% | — | +0.2% |
| Retail Sales Volume (May, m/m) | +0.3% | — | +0.5% |
| Advance Estimate – Retail Sales (Jun, m/m) | +0.4% | — | — |
Key Takeaways
- Broad-based strength: Retail sales rose 1.0% m/m, with all nine retail subsectors recording gains, indicating consumer spending remained resilient.
- Underlying demand improved: Core retail sales, excluding autos and gasoline, increased 0.9%, showing the strength extended beyond volatile sectors.
- Energy prices boosted headline sales: Sales at gasoline stations rose 3.1%, but volumes fell -2.7%, indicating higher fuel prices rather than stronger demand drove much of the increase.
- Real spending still expanded: Overall retail sales volumes increased 0.3%, suggesting consumers purchased more goods even after adjusting for price effects.
- Auto sector remained supportive: Motor vehicle and parts dealers posted a second consecutive monthly gain, led by higher new vehicle sales.
- Momentum carried into June: Statistics Canada’s advance estimate points to another 0.4% increase in June retail sales, indicating household spending remained on a firm footing heading into Q2’s close.
