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Special Report

Canada Retail Sales Research Brief

May 2024

Retail Properties Remain Well-Positioned,
Despite Softening Retail Sales

Household spending beginning to slow. Canada’s retail property sector is continuing to show healthy performance with retail sales up 1.9 per cent year-over-year in March. The nation’s vacancy rate sat just below 2.0 per cent as of the end of the first quarter, supporting annual rent growth outpacing that of inflation. Some headwinds are beginning to emerge, however, as higher interest rates are weighing on consumer confidence and overall spending. Retail sales fell 0.2 per cent monthly in March — the third consecutive decline. After accounting for inflation, this translated into a 0.4 per cent drop. Despite this, Canada’s retail property sector is well-positioned for long-term growth. This softening in consumption lends support to a midyear interest rate cut, which could aid retail spending over the second half of the year. Not only is the nation seeing its consumer base expand rapidly amid historic population growth, but retail property development has been limited in recent years. 

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