Retail Sales November 2024: Dip before next month’s boost.

“Canadian nominal retail sales were flat in November, with volumes down 0.4% as consumers delayed purchases ahead of the mid-December holiday tax break. The Business Data Lab’s Sales Tracker suggests roughly 5% growth in retail sales volumes in the fourth quarter, but today’s data leaves questions about whether this is a sustained improvement in consumer spending habits.

The Bank of Canada may choose to hold its policy rate next week, however ongoing tariff threats and a period of weak demand that left businesses with spare capacity could prompt another rate cut to support hiring and growth.”

KEY TAKEAWAYS

• Canadian nominal retail sales were flat in November and declined 0.4% on the month in volume terms. Sales decreased in 6 of 9 subsectors.
• Excluding motor vehicles and gas stations, core retail sales were down 1% on the month led by lower sales at food and beverage retailers (-1.6%), general merchandise retailers (-1%) and rate-sensitive categories like building material and garden equipment (-2.1%).
• Motor vehicles and parts were up 2% in November, with both new cars (+2.4%) and used vehicle dealers continuing to experience an uptick in sales.
• Gas station retail sales saw a rise of 0.7% m/m.
• Across provinces, 7 of 10 saw declines in retail sales in November, with increases observed in Ontario (+0.5%) and British Columbia (+0.4%) from higher sales at motor vehicle and parts dealers and Newfoundland (+1.5%). The largest declines were observed in Alberta (-1.1%) and New Brunswick (-2%).
• Looking ahead: The flash estimate for December of 1.6% is in line with our nowcasted monthly growth of 1.7% developed from Business Sales Tracker data, pointing to some momentum in consumer spending. However, today’s soft data print provides limited answers to how sustained the momentum will be, especially in light of tariff threats.

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