- Florence Jean-Jacobs
Principal Economist
Economic News
Canadian Retail Sales: A Sober October Could Give Way to a November Upswing
December 19, 2025
Highlights
- Canadians were cautious with spending again in October. Retail sales declined by 0.2% m/m, falling short of the flat print expected by economic forecasters and Statistics Canada’s earlier flash estimate (0.0%). (See table for details).
- The rebound in motor vehicle and parts sales (0.6%) was not enough to offset the significant dip in sales at food and beverage retailers (-2.0%) and gasoline stations (-0.8%). Both sales volumes and prices of gasoline were down in October.
- Core sales, which exclude gasoline stations and automotive dealers, fell for a second consecutive month (-0.5%). The key driver was a 10.6% drop in receipts at beer, wine and liquor retailers, in a month marked by labour disruptions in that sector in BC.
- Four provinces experienced declines, led by Quebec (-0.9%).
- In volume terms, retail sales decreased 0.6% in October, continuing the path observed in Q3 (-1.7% q/q annualized).
- The bigger surprise in today’s release was Statistics Canada’s advance indicator pointing to a 1.2% rebound in retail sales in November (graph). If this proves correct, it will probably be driven in roughly equal parts by growth in volumes and prices—prices of goods advanced by 0.6% m/m in November, on a seasonally adjusted basis. It would also be the second strongest monthly advance this year.
Implications
Today’s retail sales release held some interesting surprises. And despite the weak headline, they were not entirely negative.
If we look past what could well be a temporary dip at beverage retailers, other categories have proved more resilient. Notably, motor vehicle sales went up for new cars and other motor vehicle retailers, reversing course from the 2.9% September decline. Though it is still early, this could signal improved consumer confidence to start the fourth quarter of the year. Another positive surprise was the 1.2% flash for November. Easing labour disputes in BC and at Canada Post likely helped, as did higher goods prices in the month. If 1.2% proves correct, per capita nominal retail spending could have increased in November, after two consecutive monthly declines.
Still the outlook remains one of uncertainty and tepid per capita spending. Slowing population growth is expected to continue weighing on overall sales in the coming quarters. That said, today’s reading is not one that would incite the Bank of Canada to move off the sidelines.
After today’s release, we are tracking real GDP growth of around 0.5% annualized for Q4. But given this comes with strong labour market data and stable inflation near the 2% target in October and November, we expect the Bank of Canada to leave the policy rate unchanged in January. Indeed, we anticipate the Bank will remain on the sidelines through 2026 (see our latest forecast External link.).