Retail sales were up 1.1% at $70.7 billion in January, led by higher sales at motor vehicle and parts dealerships, Statistics Canada says.
Sales were up in six of the nine subsectors it tracks, as the motor vehicle and parts dealers subsector posted the largest increase in retail sales in January — up 2%, the agency said on Friday.
Andrew Grantham, senior economist at CIBC, said retail sales appear to be starting the year strong.
“A solid start to the year for retail sales could be evidence that last year’s interest rate cuts, combined with the slight reduction in unemployment since mid-2025, is supporting an upturn in consumer sentiment and spending,” he said in a note on Friday.
Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, rose 0.9% in January, led by higher sales at general merchandise retailers. Sales at sporting goods, hobby, musical instrument, book, and miscellaneous retailers increased 2.6%.
Food and beverage retailers posted the largest decline in core retail sales, down 0.6%, while sales at supermarkets and other grocers, except convenience stores, fell 0.7%.
In volume terms, retail sales were up 1% in January.
Statistics Canada said its early estimate for February pointed to a gain of 0.9%, though it cautioned the figure would be revised.
Capital Economics economist Bradley Saunders said the advance estimate for February matches the message sent by the recent improvement in consumer confidence and suggests household spending will be a tailwind for GDP growth this quarter.
“That said, with gas prices headed for $2 a litre, the hit to households’ purchasing power could crush real consumption in the second quarter,” he said in a note.