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Meanwhile, sales at motor vehicle and parts dealers were up 1.7 per cent as sales at new car dealers rose 1.8 per cent and used car dealers climbed 5.1 per cent.

Overall retail sales in volume terms were unchanged in April, Statistics Canada said. In March, retail sales volumes fell 0.7 per cent.

"Sales volumes were little changed in the month after slumping in March, as higher gas prices are taking a bite out of spending," BMO senior economist Shelly Kaushik said in a note to clients.

Overall, StatCan said sales were higher in five of the nine subsectors it tracks.

Core retail sales, which exclude gas stations and fuel vendors along with motor vehicle and parts dealers, fell 0.7 per cent in April. Sales at food and beverage retailers dropped two per cent and general merchandise retailers lost 1.7 per cent.

Signs of restrained discretionary spending were also visible in the sporting goods, hobbies, books and musical instruments category, which fell 1.5 per cent — down for a second straight month, according to StatCan.

Andrew Grantham, senior economist at CIBC, said the retail sales data is further evidence that high gas prices were cutting into households' ability to spend in other areas over the spring. 

"Softness in household spending makes it harder for companies to pass through cost increases to consumers, and therefore less likely that the prior spike in oil prices will translate into more broad-based inflationary pressures," he said.

Grantham said that's one of the reasons why he expects the Bank of Canada to keep interest rates on hold throughout 2026.

But as prices start to normalize, consumer spending is expected to recover through the rest of the year, Kaushik said.

"Lower energy prices in June and the peace deal in the Middle East could set the stage for more meaningful growth in the second half of the year," she said.

An initial agreement between the United States and Iran on Wednesday called for a permanent end to hostilities and started a 60-day negotiation clock to reach a final deal on the future of Iran’s nuclear program. 

The current deal between the U.S. and Iran waives sanctions against Iran and allows it to sell its oil freely. It also opens up the Strait of Hormuz, where a fifth of the world’s oil supply is shipped. That's eased some pressure on oil prices.

Looking ahead, Statistics Canada said its advance estimate of retail sales points to an increase of one per cent for May, though it cautioned the figure would be revised.

This report by ºÃÉ«tvwas first published June 19, 2026.

— With files from The Associated Press