- Florence Jean-Jacobs
Principal Economist
Economic News
Canadian Retail Sales: A November Upswing Amid a Subdued Q4
January 23, 2026
Highlights
- Canadians hit the stores more confidently in November, with retail spending rising 1.3% m/m. The result bested Statistics Canada’s earlier flash estimate and the survey of economic forecasters (both at 1.2%).
- Sales were broad based, increasing in 8 out of 9 categories and in Canada’s most populous provinces (see table for details).
- Sales at gasoline stations were up 2.0% m/m, driven by both volumes and prices.
- Receipts at motor vehicle and parts dealers edged up 0.3% m/m, thanks to higher volumes. Excluding autos, retail sales grew a whopping 1.7%, beating the 1.0% expectation of forecasters by a wide margin.
- Core retail sales, which exclude gasoline and autos, increased for the first time in three months (+1.6% m/m). The largest increase came from food and beverage establishments (+3.0%), more than reversing the previous month’s decline. This was in part driven by beer, wine and liquor retailers, which experienced a rebound with the resolution of labour disruptions in that sector in British Columbia.
- In volume terms, retail sales were up 1.1% in November, reversing course after two monthly declines (graph 1).
- While retail sales were up 3.1% year over year in November, the e-commerce component was down 6.7% y/y (-2.8% m/m, seasonally adjusted in the month).
- Statistics Canada’s advance indicator points to a 0.5% contraction in retail spending in December. Given a slight increase in seasonally adjusted goods prices in December, volumes are likely to have fallen even more in the month. We estimate real retail sales to have grown by 2.3% in 2025 but to have contracted by 1.6% annualized in Q4, if the flash proves correct.
Implications
Despite November’s positive headline, Q4 retail spending is likely subdued overall. For one, the impressive growth in core sales in November must be put in the context of a one-off rebound from the end of the BC Liquor strike. Second, December’s flash rounds up the fourth quarter with a probable contraction in sales volumes.
Even if real retail spending per capita is far from falling off a cliff (graph 2), consumers continue to report weak spending plans External link.. This is driven by pessimistic views of their financial situation and concerns about job loss. Notably, consumers were more worried in Q4 about missing a debt payment than in the previous quarter.
After today’s release, we are still tracking real GDP growth of around 0.3% annualized for Q4, as per our latest Economic and Financial Outlook External link..
Despite apparent weakness in consumer expectations and Q4 spending, the economy continued to create jobs External link. consistently in the quarter. We don’t think today’s retail sales release will change the Bank of Canada’s position, just as it didn’t for the December inflation External link. numbers released earlier in the week. We expect the Bank to leave the policy rate unchanged at its meeting next week.
