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Economic News

Despite Softness in the Second Half of The Year, Retail Sales Advanced in 2025

February 20, 2026
Florence Jean-Jacobs
Principal Economist

Highlights

  • Retail sales dropped by 0.4% m/m in December, one tick better than Statistics Canada’s earlier flash estimate and the survey of economic forecasters (both at -0.5%).
  • The sharp drop in sales at motor vehicle and parts dealerships (-1.6% m/m) was partially offset by a 2.8% increase in nominal sales at gasoline stations (see table for details).
  • Core retail sales, which exclude gasoline and autos, were down 0.3% m/m, driven by decreased spending at building material and gardening stores (-4.0%), as well as furniture, home furnishings, electronics and appliances retailers (-1.7%). Seasonally adjusted e-commerce sales more than recouped the prior month’s losses.
  • The volume of retail sales were close to flat as prices fell 0.3% m/m (graph 1).
  • Despite volumes contracting for the last two quarters of the year, 2025 saw a 2.3% increase (graph 2). Most categories registered annual advances, with the notable exception of gasoline stations and fuel vendors.
  • Statistics Canada’s advance indicator points to solid monthly spending in January (+1.6% month to month), which is likely driven entirely by volumes. 

Implications

Today’s release and recent retail spending patterns paint a mixed picture of Canadian consumers. While sales of motor vehicles and parts were up from 2024, momentum has slowed since September in that category. However, we expect sales to pick up going forward, with newly announced federal rebates for plug‑in hybrid and electric vehicles kicking in on February 16. Another helpful boost to groceries and essentials retail sales should come from the changes to the GST/HST credit External link..

Of course, as last year showed, retail sales often seesaw from one month to the next. As the most recent example, January’s flash points to a solid upswing, despite the difficult weather that month. So we have to examine longer-term patterns. The fact that households’ retail spending finished 2025 on a positive note is a testament to the resilience of Canadian consumers despite numerous headwinds and uncertainty in 2025. The next few months could well be volatile, but we think the upward trend in sales and volumes should continue, albeit at a moderate pace given slowing population growth and still elevated costs for households.

After today’s release, we are still tracking a flat print for real GDP growth in Q4 2025, as per our latest Economic and Financial Outlook External link..

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.