- Canada’s retail sales fell 0.7% in September 2025 to C$69.8B, with real (volume) sales down 0.8%.
- Weakness was led by motor vehicles (−2.9%) and also hit building materials and general merchandise, while food and beverage retailers rose modestly.
- E-commerce sales dropped 3.5% to C$4.1B, lowering its share of retail to 5.9%.
- October is expected to be roughly flat nominally but weaker in real terms, pointing to soft consumption and muted Q4 growth.
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The September 2025 retail trade report from Statistics Canada confirms a broad cooling in consumer demand, especially in high-ticket and interest-sensitive categories. Total retail sales declined 0.7 % to C$69.8 billion, with real (volume) sales down about 0.8 %. Much of the drag came from motor vehicle and parts dealers, whose sales slipped 2.9 % (new car dealers −3.6 %); building materials and general merchandise also saw meaningful declines. In contrast, food & beverage retailers, particularly beer, wine & liquor (+3.4 %) and supermarkets (+0.3 %), provided micro-support.
Geographic data show uneven provincial performance: Ontario posted the largest drop (−1.2 %), and in Toronto city (CMA) sales dropped ~2.3 %. Retail e-commerce also weakened, falling 3.5 % to C$4.1 billion; its share of total retail slipped to 5.9 % from 6.1 % in August.
Looking ahead, early estimates by Statistics Canada and economists suggest retail sales were flat in October. TD Economics reports a second consecutive monthly decline in October (−0.2 %) in nominal terms, with real sales deeper into decline (−0.6 %), and core categories continuing to weaken; only certain discretionary goods such as furniture & home furnishings showed some gains.
These trends carry implications for monetary policy and economic growth. With consumer spending — roughly 40 % of the Canadian economy — cooling, and major spending categories contracting, pressure increases on GDP growth forecasts. The Bank of Canada (BoC), having cut its policy rate in October to 2.25 %, may find justification in the weaker demand profile to remain on hold for now; signs of renewed weakness could reignite policy easing discussions only if inflation and employment permit.
Open questions remain around consumers’ resilience: whether services spending (travel, recreation) offsets goods weakness; how inflation, debt servicing, and labour income trends play out; and whether the holiday season will provide enough of a boost to reverse—or at least arrest—downward momentum into Q1 2026.
Supporting Notes
- Statistics Canada: Retail trade fell 0.7 % in September 2025 to C$69.8 billion; volume term drop of 0.8 %.
- Motor vehicle and parts dealers down 2.9 %; new car dealers −3.6 %; user car dealers +0.5 %.
- Building material and garden equipment retailers fell 2.0 %; general merchandise down 0.5 %.
- Food & beverage retailers up 0.8 %, notably beer, wine & liquor +3.4 %; supermarkets +0.3 %.
- Retail e-commerce sales dropped 3.5 % to C$4.1 billion; share fell from ~6.1 % to 5.9 %.
- Six of nine subsectors declined; core retail (ex autos & fuel) flat in September; core retail declined in October (−0.5 % m/m).
- October 2025: nominal -0.2 % m/m, real -0.6 % m/m; specific categories (clothing, liquor in BC) sharply down; furniture & home furnishings up.
- Ontario down −1.2 %; Toronto CMA down −2.3 %; Nova Scotia up +1.5 %.