Total retail sales

Total retail sales in Canada are projected to reach $649.8 billion in 2025, representing growth of 2.4% over the previous year. This increase reflects a recovery from the unexpected contraction experienced in 2024, when retail sales fell 1.5% to $634.8 billion as consumers pulled back spending in response to elevated interest rates and persistent affordability pressures. The 2025 rebound is being driven primarily by necessity-based retail categories including food and beverage stores, which have benefited from population growth and stabilizing inflation, as well as health and personal care retailers that have seen strong demand.

Recent monthly data reveals considerable volatility in retail performance throughout 2025, with sales rising 1.5% in June to $70.2 billion before declining 0.8% in July to $69.6 billion. Sales volumes in July fell across eight of nine subsectors, led by decreases in clothing and accessories stores where volumes dropped 2.9% as consumers remained cautious about discretionary purchases. Food and beverage stores have shown the most consistent strength, though even this category has experienced shifts as consumer boycotts of major chains like Loblaws have redirected spending toward smaller local grocers and warehouse retailers such as Costco.

The past five years have witnessed significant disruption in Canadian retail, beginning with the pandemic-induced decline of 2.3% in 2020 as lockdowns shuttered non-essential retailers and shifted consumer spending patterns. Recovery came swiftly in 2021 with growth of 3.7% as pent-up demand was released and government transfer payments bolstered household purchasing power. However, momentum stalled in 2022 with growth of just 0.2% as inflation eroded real incomes and interest rate hikes reduced discretionary spending capacity.

Retail sales surged 6.3% in 2023 to reach $644.4 billion, the strongest annual growth since the immediate post-pandemic recovery, driven by robust immigration-fueled population growth, elevated inflation that inflated nominal sales values, and strong performance in necessity-based categories. This spike proved unsustainable, as evidenced by the 1.5% contraction in 2024 when higher borrowing costs and deteriorating consumer confidence weighed on spending across most categories. Enclosed shopping malls and fashion retailers experienced the most severe pressure, while neighbourhood and strip centres fared better due to their concentration of essential retail categories.