Canadian retail sales increased by 0.7 percent to $66.8 billion in April, with higher sales reported at gasoline stations and food and beverage retailers.
Statistics Canada stated on June 21 that sales rose in seven out of nine subsectors it monitors, with sales at gasoline stations and fuel vendors seeing a 4.5 percent increase.
However, the agency also mentioned that its preliminary estimate for retail sales in May indicated a decline of 0.6 percent, although this figure is subject to revision.
“The overall trend in spending suggests weakness, with minimal growth in the three-month average rate in April, which then reversed in May,” noted TD Bank economist Maria Solovieva in a report.
“Moreover, recent industry data indicates sluggish demand in auto sales will impact durable goods spending for the rest of the quarter.”
The motor vehicle and parts dealers group experienced the largest drop in April, with a 2.2 percent decrease, including a 2.9 percent decrease in sales at new car dealers.
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Core retail sales, excluding gasoline stations, fuel vendors, and motor vehicle dealers, increased by 1.4 percent in April.
Sales at food and beverage retailers rose by 1.9 percent, while clothing and clothing accessories retailers saw a 2.1 percent increase. The sporting goods and miscellaneous subsector also grew by 3.4 percent.
In terms of volume, retail sales in April increased by 0.5 percent.
The release of retail sales data followed the Bank of Canada’s decision earlier in the month to reduce its key interest rate by a quarter of a percentage point to 4.75 percent.
This marked the first time since March 2020, during the early stages of the pandemic, that the central bank lowered its policy rate.
The central bank had contemplated waiting until July to start lowering interest rates, but ultimately opted for a cut.
