Retail sales rose 1.1% in April, Statistics Canada says

Canadian retail sales came in stronger than initially estimated, as gains at general merchandise retailers and food and beverage stores led the way higher.

Statistics Canada said Wednesday retail sales rose 1.1% to $65.9 billion in April, topping its initial estimate for the month that pointed to an increase of 0.2%.

The agency’s advance estimate for May suggested a gain of 0.5% for that month, though it cautioned the figure would be revised.

BMO economist Shelly Kaushik said the Canadian consumer continued to prove its resilience.

“That said, higher prices drove most of the increase as spending volumes rose at a much slower pace,” Kaushik wrote in a report.

In volume terms, retail sales rose 0.3% for April.

“Looking ahead, momentum in consumer spending is expected to slow in the second half of the year, as yet-higher interest rates and still-elevated inflation continue to weigh on purchasing power,” Kaushik wrote.

The Bank of Canada raised its policy interest rate by a quarter of a percentage point earlier this month to 4.75%, a move that prompted the country’s big banks to raise their prime rates.

The central bank has raised concerns that inflation seems to be more sticky than expected and will be harder to get it back down to its 2% target.

Statistics Canada said sales at general merchandise retailers rose 3.3% in April, while food and beverage retailers saw a gain of 1.5%.

Sales at motor vehicle and parts dealers gained 0.5% in April, helped higher by a 3.7% rise at used car dealers and a 3.5% increase at automotive parts, accessories and tire retailers.

Sales at furniture, home furnishings, electronics and appliance retailers fell 1.6%.

Core retail sales — which exclude gasoline stations and fuel vendors, and motor vehicle and parts dealers — gained 1.5% in April.

The Canadian Press

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