National Bank Still Sees "Moderate" Retail Activity in Canada Going Forward

07:09 AM EDT, 03/23/2026 (MT Newswires) -- Statistics Canada's advance estimate for retail sales points to a 0.9% month-over-month nominal increase in February retail sales, said National Bank of Canada.

With goods prices rising only modestly in the February consumer price index report, this implies a "solid" gain in real terms, noted the bank.

If this momentum holds, real retail sales could grow at a 6.8% annualized pace in Q1, following a 1.3% decline in the previous quarter -- marking the strongest quarterly performance in a year and a half, stated National Bank.

This rebound is occurring against a backdrop of demographic contraction, pointed out the bank. New figures from StatsCan indicate that Canada's population declined for a second consecutive quarter -- an unprecedented development.

As a result, real retail spending per capita is tracking a 7.9% increase in Q1, the strongest showing since the extreme pandemic fluctuations, added National Bank. While impressive on the surface, it highlights a more troubling trend: population-driven demand erosion is likely to weigh on retail activity this year.

This comes alongside a negative mortgage interest-payment shock and rising energy prices. The resulting squeeze will shrink purchasing power. Accordingly, National Bank continues to expect "moderate" Canadian retail activity going forward.

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