Last week, we reported on the high level of economic anxiety among consumers, primarily centered on the cost of living. Today’s Twenty-Four looks at the actual spending of consumers in Alberta from January to November last year (we’re still waiting for the December numbers).

Retail momentum driven by vehicle sales

Despite ongoing concerns about the rising cost of living, retail spending* in Alberta has demonstrated strong year-to-date (YTD) growth, increasing by 4.7% compared to the first eleven months of 2024, according to the latest data from Statistics Canada.

This growth was, however, not uniform. A significant acceleration in consumer purchases began in late 2024, continuing into a strong Q1 of 2025 as consumers aimed to preempt expected tariff-related price hikes. Following this initial surge, momentum slowed, and Q3 sales remained largely flat compared to Q1 levels. A sharp increase was subsequently observed in November, pushing sales 2.2% higher than the peak reached in January 2025. One month does not establish a trend but we are monitoring the situation closely.

Motor vehicle sales, particularly from new car dealers, have been a disproportionately large contributor, accounting for nearly half of the total gain. Corroborating this, separate data for new motor vehicle sales (including heavy-duty industrial trucks) shows a 5.9% jump over the same time period to finally surpass pre-pandemic levels.

Outside of consumer demand, the auto sector faces various dynamics that will shape future sales. This includes ongoing concerns over U.S. tariffs dampening domestic production and consumer anticipation of the upcoming limited entry of Chinese EVs into the market.  

Resilience in other sectors

Beyond auto sales, other retail sub-categories have also demonstrated resilience. In fact, all retail sub-categories, except for gasoline stations, have posted strong YTD increases, led by gains in clothing, jewelry, and general merchandise. Gasoline station revenues, meanwhile, were pushed down by lower prices stemming primarily from the removal of the consumer carbon tax and lower oil prices last year.

Our ATB Mastercard transaction data suggests that total spending, excluding autos, remained largely flat in December, aligning with the general national softening indicated by Statistics Canada's advance estimates.

Dining out momentum steady amid headwinds

Dining out (which includes ordering delivery) in Alberta continues to be a strong trend, correlating with the overall strength of retail sales in the province.

YTD revenues for food services and drinking places have increased by 5.9%. Notably, only 1.2% of this growth was due to price increases last year. This indicates, as previously observed, that the restaurant industry is largely absorbing higher operational costs instead of fully passing them on to consumers. In contrast, grocery store prices saw a higher increase of 3.8% over the same period last year.

Multiple factors likely contribute to this sustained dining activity, including a resilient labour market, shifting Canadian travel habits (more staycations in favour of cross-border trips) and steady population growth, notably from internal migration to Alberta.

Despite encouraging sales, the sector is under pressure; an estimated 41% of Canadian restaurants are operating at or below margin as they continue to navigate lingering economic difficulties since the COVID-19 pandemic.  

Consumer outlook

Alberta's consumer spending is currently aligning with our most recent forecast. Following an estimated 2.5% rise in 2025, we project that total inflation-adjusted (real) consumer spending (covering both goods and services) will see comparable growth this year.

Several factors are contributing to this outlook. Supporting growth are lower interest rates, gains in equity markets, and recent improvements within the labour market. Conversely, headwinds like slower population growth, mortgage renewals at higher rates, the aforementioned concerns about the rising cost of living, and continued geopolitical instability are constraining overall spending.

Sidenote: To celebrate our wedding anniversary (#11), my wife and I are supporting local businesses and going out to a restaurant tonight!

*All data in this report have been adjusted for seasonal fluctuations.

Answer to the previous trivia question: In December 2000, the Bank of Canada began setting its policy interest rate (a.k.a the target for the overnight rate) on eight fixed dates per year.

Today’s trivia question: When was the iconic Tiffany Blue Box introduced?