Higher gasoline prices lifted Canadian retail sales in March, but much of the increase was due to inflation rather than stronger consumer demand.
Retail sales rose 0.9 percent to $72.7 billion in March, according to Statistics Canada. The increase was driven mainly by gasoline stations and fuel vendors, where sales climbed 12.4 percent as oil prices rose during the Middle East conflict.
The gains were weaker beneath the surface. Core retail sales, which exclude gasoline stations and auto dealers, fell 0.1 percent. In volume terms, overall retail sales dropped 0.7 percent, meaning Canadians bought fewer goods despite spending more money.
Sales at gasoline stations increased because of higher prices, not higher demand. Fuel sales volumes fell 1.9 percent during the month.
Auto sales also weakened. Sales at motor vehicle and parts dealers fell 0.5 percent, led by a 4.0 percent decline at used car dealers. New car sales slipped 0.1 percent after two months of gains.
Building material and garden equipment stores posted another decline, with sales down 2.9 percent in March after falling in February. General merchandise retailers also saw sales fall 0.5 percent, the first decline in three months.
Food and beverage retailers recorded one of the few gains outside the fuel sector. Sales rose 0.5 percent, led by supermarkets and grocery stores.
Retail sales increased in nine provinces. Ontario posted the largest increase in dollar terms, rising 1.4 percent. Alberta retail sales rose 2.6 percent, again driven mainly by gasoline sales.
Quebec was the only province to record a decline. Retail sales fell 0.8 percent, while Montréal sales dropped 2.0 percent.
Online retail sales increased 1.5 percent to $5.1 billion in March and accounted for 7.1 percent of total retail trade.