Retail sales were up 1.1 per cent at $70.7 billion in January, driven 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 two per cent, 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 per cent in January. It was led by higher sales at general merchandise retailers while sales at sporting goods, hobby, musical instrument, book, and miscellaneous retailers increased 2.6 per cent.
Food and beverage retailers posted the largest decline in core retail sales, down 0.6 per cent, while sales at supermarkets and other grocers, except convenience stores, fell 0.7 per cent.
In volume terms, retail sales were up one per cent in January.
Statistics Canada said its early estimate for February pointed to a gain of 0.9 per cent, 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.
This report by The Canadian Press was first published March 20, 2026.
