A drop in food and beverage sales led a 0.2 per cent decline in

retail sales in October, to $69.4 billion, according to Statistics Canada . StatCan said core retail sales, which exclude gas stations, fuel vendors and motor vehicle and parts dealers, were down for the second consecutive month, dropping 0.5 per cent. Sales of beer, wine and liquor posted the biggest decline, at 10.6 per cent.

However, the drop in alcohol sales coincided with labour disruptions by public-sector workers in B.C., which included employees at provincial liquor stores.

Supermarkets and other grocery retailers across the country reported lower receipts in October, down 0.7 per cent.

Aside from food and beverage, sales were down in three other subsectors.

Clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers had a 0.7 per cent drop in sales. Sales at health and personal care retailers were down 0.3 per cent.

Meanwhile, furniture, home furnishings, electronics and appliances retailers contributed the largest increase to core retail sales in October, at 1.1 per cent.

In volume terms, retail sales for the month decreased 0.6 per cent.

Statistics Canada said its advance estimates suggest a rebound in November, with sales increasing 1.2 per cent.

In a note, Canadian Imperial Bank of Canada economist Andrew Grantham said retail sales volumes likely remained below their average from the summer, even after accounting for the solid rebound suggested by the November advance estimate.

He said the underlying trend in retail sales appears relatively flat and signals a slowdown compared to the surprising strength seen at the start of the year.

“Through the ups and downs of the monthly volatility, Canadian retail sales appear to be going nowhere so far during the second half of the year,” wrote Grantham.

He added that Canada’s weakening population growth may partly be reflected in the softer underlying trend for retail sales so far in the second half of the year.

But there also seems to be some caution among Canadian households when it comes to spending, he said.

Grantham said this could mean demand is not excessive and underlying inflation should continue to ease and allow the

Bank of Canada to keep rates at the current lower level through 2026. In another note, David Rosenberg , founder and president of Rosenberg Research Associates Inc., said the downward year-over-year trend — and retail sales activity now being lower than it was at the end of 2024 — does not bode well for Q4 GDP.

“And markets seem to believe that in this squishy-soft demand environment, the next move by the Bank of Canada will be to hike rates,” he wrote, adding, “Not likely.”

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