Retail gross sales fell 0.4% to $69.3 billion in February, dragged down by a pointy drop at auto sellers and continued weak point in housing-related classes.

It’s the second straight month-to-month drop and caps off a sluggish first quarter for Canadian shoppers.

The most important hit got here from motorized vehicle and components sellers, the place gross sales tumbled 2.6%. All 4 retailer sorts within the class had been down, with new automotive sellers posting a 3.0% drop.

In the meantime, core retail gross sales—which strip out gasoline and auto-related purchases—rose a modest 0.5%, buoyed by grocery and liquor retailer gross sales. In quantity phrases, retail gross sales additionally declined by 0.4%.

Seven provinces recorded month-to-month declines, with Quebec (-0.9%) and Nova Scotia (-2.6%) main the best way. Manitoba stood out with a 1.8% acquire, due to greater car gross sales.

E-commerce gross sales additionally dipped barely, down 0.3% to $4.3 billion, representing 6.3% of all retail commerce.

What this implies for future price cuts

Whereas February’s information present ongoing shopper fatigue, March may look briefly higher. StatCan’s early estimate suggests gross sales rebounded by 0.7% final month—seemingly boosted by Canadians dashing to purchase big-ticket objects earlier than new tariffs kicked in.

However economists from BMO and CIBC agree that the bounce isn’t prone to final.

This “is a glance within the rearview mirror at this level,” BMO’s Shelly Kaushik wrote, noting that shopper sentiment has since taken a success from the continuing commerce warfare.

CIBC’s Katherine Decide agreed, pointing to rising uncertainty and indicators that job losses may begin mounting—elements that might maintain consumers on the sidelines heading into spring.

Decide stated the Financial institution of Canada ought to have “sufficient proof of GDP weak point by the
June assembly to chop charges by 25bps.”

That’s consistent with what the Financial institution of Canada has heard from shoppers instantly. Its newest Canadian Survey of Consumer Expectations exhibits households are as anxious concerning the financial system now as they had been in the course of the peak of the pandemic.

OIS market pricing at present places the percentages of a 25-basis-point price minimize at roughly 66% for the Financial institution’s June 4 assembly, which might carry its coverage price all the way down to 2.50%.

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Final modified: April 25, 2025