Toronto, ON, February 8, 2023 – Canadian Retail sales, as tracked by The NPD Group, softened in 2022 but remain elevated from pre-pandemic levels.Sales were flat in 2022 compared to the previous high watermark growth of 2021 when total retail sales increased 12%. While this signals a change in consumer spending, overall retail spending was 7% above pre-pandemic levels in 2019.

Over the last two years, growth has been driven by average sales price (ASP) increases. In 2022, ASP increased 5% year-over-year, while unit sales were 5% below 2021 and 6% below 2019.

“The first quarter in Canada was still very much about re-emerging from the pandemic cycle of societal shut downs, mandates, and retail closures,” said Tamara Szames, Canadian retail industry advisor with The NPD Group. “As restrictions across the country were lifted, consumers returned to their pre-pandemic routines and retail spending quickly ramped up.”

The second quarter of 2021 followed suit, with year-over-year growth of 5%. Travel, employees returning to offices, celebrations, and normalcy all started to come together, just as the weather turned and, as a result, April was the strongest month in retail in Canada in 2022.

“Unfortunately, the demand we saw in the first two quarters of the year proved to be short lived in Canada as consumers started to feel the impact of rising inflation and other macro-economic pressures,” said Szames.

The key back-to-school shopping season was strongly impacted by these increasing pressures, and sales in Q3 decreased by 1%. The fourth quarter saw a continuation of the declines, which began in the late summer. It was the softest of all four quarters in Canada for 2022. Total retail sales were down 5% between October and January as consumers became more cautionary with their discretionary spending.

Despite the lackluster fourth-quarter performance, 2022 was a year of recovery for the Canadian consumer. All industries except apparel recovered and retuned to growth in 2022. Consumers prioritized experiences while at the same time pulling back on home and comfort spending. Makeup, suits, dresses, fashion shoes and sandals, and portable audio all topped the list for top performing categories in Canada in 2022.