Canadian retail sales saw their largest monthly increase since May 2022, with a 2.5% increase in December to $69.6 billion. However, the momentum from the strong finish to 2024 appeared to evaporate as the preliminary estimate for January pointed to a 0.4% decline to start the new year.
CIBC senior economist Andrew Grantham said consumer spending was clearly improving during the second half of 2024, even before accounting for the temporary boost in December from the GST holiday. However, recent tariff uncertainty may have resulted in households tightening the purse strings again.
Statistics Canada reported that December sales were up in all nine sub-sectors, with food and beverage retailers rising 3.5% for the month. Motor vehicle and parts dealers also saw a 1.9% increase, boosted by a 2.0% gain at new car dealers. Automotive parts, accessories, and tire retailers rose 4.7% and used car dealers added 3.2%. Core retail sales, which exclude gasoline stations and fuel vendors, rose 2.5% in December.
In volume terms, retail sales in December rose 2.5%. BMO senior economist Shelly Kaushik wrote that these figures add to the argument for the Bank of Canada to pause at next month’s meeting. The Bank of Canada’s next scheduled interest rate decision is set for March 12.
Canadian retailers finished 2024 with a 1.3% increase in sales, reaching $803.1 billion. Motor vehicle and parts dealers saw the most sales, with 2.9% growth, followed by new car dealers. Gasoline stations and fuel vendors saw the largest decrease, largely due to lower prices. Core retail sales increased by 1.3%, with higher sales at general merchandise retailers and health and personal care retailers. Food and beverage retailers also saw growth, with supermarkets and other grocery retailers seeing gains in seven of the 12 months.
Source: Globe and Mail
Source: The Star
Source: Financial Post
Source: Statistics Canada
