Retail sales rose 3.2% in January amid Omicron surge: Statistics Canada

Retail sales rose 3.2% to $58.9 billion in January, even with public health restrictions in several parts of the country to deal with the Omicron surge in COVID-19 cases at the start of the year, Statistics Canada said Friday.

However, the agency said its early estimate for February suggested retail sales fell 0.5% for that month, though it cautioned the figure would be revised.

BMO economist Shelly Kaushik said retail sales, which fell in December, posted an impressive rebound in January, despite the persistent restrictions and pandemic concerns.

"Still, it looks like activity pulled back in February, likely with some diversion into services spending as restrictions loosened in that month," Kaushik wrote in a report.

"Overall, consumer demand remains robust, even as another month of strong inflation eroded some purchasing power."

Earlier this week, Statistics Canada said the annual inflation rate for February rose to 5.7% compared with a year-over-year rise in the consumer price index of 5.1% in January.

Statistics Canada said Friday retail sales were up in nine of the 11 subsectors it tracks.

The rise in January was led by an improvement at motor vehicle and parts dealers which gained 5.3% helped by a 5.5% increase at new car dealers and a 9.7% rise at used car dealers. Sales at gasoline stations were unchanged in January.

Excluding motor vehicle and parts dealers and gasoline stations, retail sales rose 2.9%.

Sales at building material and garden equipment and supplies dealers gained 8.9%, while sales at food and beverage stores rose 2.2%.

Clothing and clothing accessories stores saw sales fall 3.5%.

In volume terms, overall retail sales rose 2.9% in January.