Canada’s retail sales stagnated to start the year as consumers pulled back on discretionary spending.
According to data from Statistics Canada, retail sales across the country were flat in this year’s first quarter, marking the weakest pace of consumer spending since the second quarter of 2023.
The drop in retail sales was led by spending at gas stations as the cost to fill a vehicle’s tank rose between January and March. On the flipside, car sales rose during Q1.
However, excluding gas stations and automotive dealers, core retail sales were unchanged in the period as consumers cutback discretionary spending on clothing and other items.
Regionally, sales were down in seven Canadian provinces, with the largest declines seen in Alberta, Ontario, and Quebec.
The weak retail sales bolster the case that the economy is slowing and could embolden the Bank of Canada to begin cutting interest rates at its next policy meeting in June.
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