Statistics Canada says retail sales rose 1.1% in April to $65.9 billion

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

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

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The agency’s advance estimate for May suggested a gain of 0.5 per cent 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 per cent 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.

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The Bank of Canada raised its policy interest rate by a quarter of a percentage point earlier this month to 4.75 per cent, 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 two per cent target.

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

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

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

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

This report by The Canadian Press was first published June 21, 2023.