Canada Retail Sales (May 2026)

Consumers unphased by higher gasoline prices

The rise in retail sales volumes in May and flash estimate of another solid gain in June suggests households have shrugged off higher gasoline prices associated with the Iran war, and poses an upside risk to our already-solid forecast for a 2.3% annualised rebound in GDP in the second quarter.

The 1.0% m/m rise in sales values in April was consistent from the flash estimate and followed a slightly downwardly revised 0.4% m/m increase in March. As was the case in prior months, the largest increase in sales was at gasoline stations and fuel vendors (+3.1%), though this was entirely due to higher prices – sales fell in volumes terms. However, sales also rose in all other eight subsectors Stats Cans records, showing there was broad-based strength in spending despite higher prices at the pump. In volumes terms, sales rose by 0.3% m/m.

The other piece of good news was the flash estimate for June, which suggests retail sales rose by 0.4% m/m last month. Given a sharp drop back in gasoline prices led a 1.2% m/m fall in total goods prices that month, sales will have been even stronger in volumes terms. That tracks with the recent pickup in consumer confidence and suggests that consumer spending had plenty of momentum heading into the third quarter.