Retail gross sales fell 0.4% to $69.3 billion in February, dragged down by a pointy drop at auto sellers and continued weak spot in housing-related classes.
It’s the second straight month-to-month drop and caps off a sluggish first quarter for Canadian customers.
The most important hit got here from motorcar and components sellers, the place gross sales tumbled 2.6%. All 4 retailer varieties within the class had been down, with new automobile sellers posting a 3.0% drop.
In the meantime, core retail gross sales—which strip out gasoline and auto-related purchases—rose a modest 0.5%, buoyed by grocery and liquor retailer gross sales. In quantity phrases, retail gross sales additionally declined by 0.4%.
Seven provinces recorded month-to-month declines, with Quebec (-0.9%) and Nova Scotia (-2.6%) main the way in which. Manitoba stood out with a 1.8% acquire, due to increased automobile gross sales.
E-commerce gross sales additionally dipped barely, down 0.3% to $4.3 billion, representing 6.3% of all retail commerce.
What this implies for future price cuts
Whereas February’s information present ongoing client fatigue, March may look briefly higher. StatCan’s early estimate suggests gross sales rebounded by 0.7% final month—seemingly boosted by Canadians speeding to purchase big-ticket gadgets earlier than new tariffs kicked in.
However economists from BMO and CIBC agree that the bounce isn’t prone to final.
This “is a glance within the rearview mirror at this level,” BMO’s Shelly Kaushik wrote, noting that client sentiment has since taken a success from the continuing commerce battle.
CIBC’s Katherine Decide agreed, pointing to rising uncertainty and indicators that job losses may begin mounting—elements that might maintain consumers on the sidelines heading into spring.
Decide mentioned the Financial institution of Canada ought to have “sufficient proof of GDP weak spot by the
June assembly to chop charges by 25bps.”
That’s consistent with what the Financial institution of Canada has heard from customers instantly. Its newest Canadian Survey of Client Expectations reveals households are as anxious in regards to the economic system now as they had been throughout the peak of the pandemic.
OIS market pricing presently places the percentages of a 25-basis-point price reduce at roughly 66% for the Financial institution’s June 4 assembly, which might carry its coverage price right down to 2.50%.
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Final modified: April 25, 2025
