Canadian consumers are feeling the pinch as retail sales remain stagnant, with no signs of growth since the beginning of 2024. According to an advance estimate from Statistics Canada released on Wednesday, retail sales were unchanged in March, following a 0.1 per cent drop in February. This disappointing performance missed expectations for a 0.1 per cent gain in a Bloomberg survey.
The lackluster sales figures in the first three months of the year point to the weakest pace since the second quarter of 2023, with consumers cutting back on discretionary products like clothing, accessories, and sporting goods. The decline in sales was more widespread in February than in January, highlighting the challenges facing consumers amid rising costs of living and financing.
Economists are predicting further struggles for retail sales, with factors like the mortgage renewal cycle, slowing population growth, and rising business insolvencies pushing the unemployment rate higher. This data has led experts to believe that a Bank of Canada interest-rate cut is likely at the next meeting in June.
Regionally, sales were down in seven provinces in February, with the largest declines in Alberta, driven by lower car sales. Even Canada’s most populous provinces and cities saw decreases in retail receipts. Despite the overall softness, there is some optimism as auto sales showed resilience in March, according to analysts.