Cutting in front of tariffs: Vehicle sales driving retail spending in Alberta
We noted on Friday that retail sales in Alberta are up compared to last year, but have flattened out since January. Highlighting the overall resilience of consumer spending, year-to-date (YTD) sales through April were 5.5% higher than over the same period in 2024.* Taking into account population growth, sales were still up, but by a more modest 2.6%. Pointing to potential cracks in the resilience, however, is the role being played by auto sales. Sales of vehicles have been driving recent gains. This spike is likely due to consumers trying to get in front of expected price increases from the tariffs and is unlikely to persist. Sales at new car and truck dealers were up by 10.3% (YTD). When this subsector is subtracted, retail sales growth falls to 4.1%. Accounting for population growth, it came in at just 1.2%. Interestingly, sales growth at used car dealers were particularly strong at 21.8%. Used car sales, however, represent less than 10% of total auto sales in the province. Looking at the metro areas of Calgary and Edmonton,** stronger new car and truck sales led to faster retail spending growth in Edmonton (+ 5.1% YTD) than in Calgary (+2.5%). Looking ahead, with low levels of consumer confidence and elevated unemployment hanging over the retail sector, and the front-loading of auto sales likely to dissipate, our forecast is for retail sales to grow by 3% this year, just above the rate of population growth. *Today’s Twenty-Four refers to non-seasonally adjusted retail sales because seasonally adjusted data by retail subsector are not available from Statistics Canada. **Statistics Canada does not provide retail sales data for other sub-regions in Alberta. Answer to the previous trivia question: The Canadian Consumer Price Index (CPI) survey tracks the prices of approximately 700 goods and services purchased by Canadian households. Today’s trivia question: In what year did the first international shipment of liquified natural gas (LNG) take place?
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