Retail sales in Canada were virtually unchanged in March at $60.1 billion as sales at new car dealers fell, offsetting gains elsewhere as consumers showed a willingness to keep spending, Statistics Canada reported Thursday.
The result compared with the federal agency's initial estimate for the month that suggested sales rose 1.4%. The preliminary estimate for April suggests retail sales rose 0.8% for the month, but the agency cautioned the figure would be revised.
Statistics Canada said sales in March were up in 10 of the 11 subsectors it tracks, representing 75 per cent of retail trade.
However, sales at motor vehicle and parts dealers fell 6.4% as new car dealers saw a drop of 5.9%.
"A lack of supply, as chip shortages hamper production, continues to weigh on vehicle sales," Benjamin Reitzes, managing director of Canadian rates and macro strategist with BMO Capital Markets, said in a client note.
"That's been a theme for some time, but is expected to ease as we work through 2022."
Sales at gasoline stations rose 7.4% in March.
"Unfortunately, a good chunk of that underlying strength was due to broadly higher prices," Reitzes said.
Meanwhile, core retail sales—which exclude gasoline stations and motor vehicle and parts dealers —increased 1.5% in March.
In volume terms, retail sales fell 1% in March.
"It's clear that inflation is eroding purchasing power," Reitzes said.
Consumer enthusiasm could wane in the months ahead as higher interest rates ripple through the economy, he added.