This year, Canada‘s retail sales growth surpassed a large portion of the global average, demonstrating the tenacity of Canadian consumers in the face of increasing inflation and recessionary forecasts.
According to Colliers’ 2023 Retail Outlook, Canadian retail sales increased 2.4% in March compared to the same month the previous year, outpacing most developed countries globally.
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In contrast, retail sales in the United States increased by just 1.6% while falling in the United Kingdom, France, and Germany. However, as borrowing prices increase and the labor situation deteriorates, new retail sales numbers issued by Statistics Canada this week may indicate symptoms of declining consumer demand and spending.
With a growth of 5.7% annualized in the first quarter of 2023, consumer spending proved to be remarkably resilient early on. Although recent monthly estimates have been weaker, the January expenditure surge was mostly responsible for that increase.
- Canada’s retail sales growth surpasses the global average, showcasing consumer resilience.
- US retail sales rise by 1.6%, UK, France, and Germany fall.
- Retail sales are highest in provinces with high inflows and lowest living costs.
Despite expenditure showing remarkable resiliency year-to-date, we continue to anticipate a decline in spending over the second half of this year.
Retail sales have been highest in provinces that saw a major inflow of Canadians from other parts of the nation during the pandemic and have been strongest across Canada in areas with lower costs of living. Retail sales fluctuated the least in the least affordable areas while increasing in the most affordable areas.
Canadian retail sales have continued to benefit from the country’s rapid population expansion when compared to other wealthy nations. Sales have been significantly influenced by demand for entertainment, hospitality, and travel.
Retail rents have increased to record levels as a result of increased leasing demand, low vacancy rates, and a dearth of new construction.
