Higher sales at gas stations, driven by rising prices, helped boost Canadian retail sales in March, according to preliminary data from Statistics Canada. The agency reported that retail sales increased by 0.7% in March, following a 0.2% decline in February. The gains were largely attributed to higher spending at gasoline stations, where sales rose by 2.3% as prices at the pump climbed.
Core Retail Sales Rise
Excluding gas stations, retail sales were up 0.4% in March. Increases were also seen at motor vehicle and parts dealers, as well as at food and beverage stores. However, sales at clothing and accessories stores declined.
Regional Performance
On a regional basis, sales increased in seven provinces, with the largest gains in Alberta, British Columbia, and Quebec. Sales fell in Manitoba, Saskatchewan, and Newfoundland and Labrador.
The report provides an early look at consumer spending trends as the economy faces headwinds from high inflation and rising interest rates. The Bank of Canada has raised its key interest rate several times over the past year to combat inflation, which remains above the central bank's 2% target.
Outlook for Consumer Spending
Economists expect consumer spending to slow in the coming months as higher borrowing costs and inflation weigh on household budgets. However, a strong labor market and pandemic-era savings could provide some support.
Statistics Canada will release full March retail sales data, including detailed breakdowns by industry and province, on May 22.
