Canada’s retail trade experiences a 0.6% drop in January, with notable shifts across various sectors.
Canada’s retail sector saw a slight decrease in January 2025, as retail sales dropped by 0.6%, totaling $69.4 billion. The decline was observed in three out of nine subsectors, with motor vehicle and parts dealers bearing the brunt of the losses.
According to the latest data from Statistics Canada, sales at motor vehicle and parts dealers saw a significant drop of 2.6%, largely driven by a 3.2% decrease in new car sales and a 2.8% dip in automotive parts, accessories, and tire retailing. However, the used car market bucked the trend, with sales at used car dealers rising by 1.6%.
The drop in motor vehicle sales was one of the key contributors to the overall decline in the retail trade. But not all sectors followed the downward trajectory. Gasoline stations and fuel vendors experienced an uptick, with sales climbing 3.2%, marking the fourth consecutive month of growth in this category.
Core retail sales also saw a decline of 0.2% in January, following a strong increase of 2.7% in December 2024. The downturn was largely attributed to a decrease in food and beverage sales, which fell by 2.5%. This was mainly driven by a 3.4% drop in supermarket and grocery store sales, excluding convenience retailers. Beer, wine, and liquor stores also experienced a slight dip of 2.0%.
Sporting goods, hobby, and miscellaneous retailers also struggled, with a 2.2% decrease in sales. On the flip side, the furniture, home furnishings, electronics, and appliances sectors saw a positive turn, with a 3.0% rise in sales.
Retail performance in Canada varied from province to province. The most significant decline in dollar terms was observed in Quebec, where sales dropped 2.7%. This was a stark contrast to the 3.8% growth the province saw in December 2024. In the Montréal census metropolitan area, retail sales fell by 1.0%.
Ontario also experienced a drop in sales, with a 0.9% decrease. The decline in motor vehicle and parts sales played a central role, and the Toronto CMA reported a slightly higher decrease of 1.7%.
On a more positive note, Saskatchewan saw a strong retail performance, with a 2.7% increase in sales.
Retail e-commerce in Canada also faced a slight decline. Online retail sales fell by 0.9%, amounting to $4.2 billion, and represented 6.1% of the total retail trade. This decrease indicates a shift in consumer preferences, with traditional brick-and-mortar stores maintaining a stronger foothold in January compared to the online space.