Canada Retail Sales Research Brief

Retail sales take anticipated step back after recent events. February was marked by U.S. tariff announcements and retaliatory measures, their subsequent pauses, and the resulting drop in consumer confidence. As such, the 0.4 per cent monthly fall in retail sales values and volumes should not come as a surprise; that said, severe weather – rather than a slump in confidence – appears to be the main contributor to February’s decline. Preliminary estimates for March suggest retail sales rose 0.7 per cent, which would translate into a more than 1.0 per cent jump in total sales volumes. The Bank of Canada’s first quarter business outlook survey also suggests that firms’ future sales expectations are holding up. Meanwhile, households have yet to significantly increase precautionary savings, indicating that other factors were influencing the February drop in consumer spending.