Mastercard SpendingPulse: Canadian retail sales up +2.6% year over year in February

Canadian total retail sales, excluding Automotive, increased +2.6% YOY in February, according to Mastercard SpendingPulse^TM, which measures in-store and online retail sales across all forms of payment. Mastercard SpendingPulse reflects nominal spending and is not adjusted for inflation.

At a national level, key retail trends from February include: 

• E-commerce down slightly as in-store shopping continues to grow: Following months of strong growth in 2022, E-commerce sales began to slow, down -3.1% YOY as consumers returned to shopping In-Store (+4.1% YOY) more frequently again.
• Spending on loved ones: Apparel (+9.9%) and Jewelry & Leather Goods (+1.4% YOY) experienced positive growth in February as consumers shopped for Valetine’s Day gifts and Spring wardrobes. Canadians also continued to spend at Restaurants (+18.7% YOY) as loved ones prioritized dinners out for Valentine’s Day.
• Housing related spending softens: With the continued prioritization of experiences for Canadians, updates and projects around the home continued to slow. Home Improvements fell -12.1% YOY, followed by Home Furniture & Furnishings -4.0% YOY. Electronics also slowed -5.1% YOY.

“We saw e-commerce soar in the last couple of years, but now Canadians have more flexibility for spending” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “This flexibility is why we are seeing e-commerce slow slightly, and in-store spend grow modestly in February.

“Canadian consumers continue to spend but at a decelerating rate,” said Michelle Meyer, North America Chief Economist, Mastercard Economics Institute. “On the upside, solid spending at restaurants reflects the continued interest in experiences, which are prioritized by Canadian consumers. On the downside, spending is down from last year for bigger ticket items including electronics, furniture and home improvement items, reflecting the weakening in the housing market amid higher interest rates.”