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RBC Canadian cardholder spending takes a breather in January after holiday rush
By Abbey Xu and Rachel Battaglia
January spending snapshot: RBC Canadian cardholder spending softened in January after a long stretch of gains late last year as consumers pulled back, especially on discretionary goods.
Core retail sales fell 0.3% on three-month average—marking the first decline after 13 months of growth.
Several temporary factors likely weighed on spending at the start of the year. Severe winter weather, including snowstorms and periods of extreme cold, likely disrupted in-person activity in parts of the country. At the same time, post-holiday fatigue appears to have set in with households holding back after heavier spending in November and December.
The broader trends remain constructive, but January’s softness suggests some loss of momentum as households moved past the holiday spending period.
Discretionary goods see sharpest pullback after strong December
Discretionary goods recorded the largest decline in January across broad spending categories.
December had been an especially strong for goods tied to holiday shopping, and January largely retraced some of those earlier gains. The reversal points to a normalization following elevated year-end spending rather than a sudden deterioration in household demand.
Essentials spending also declined in January, extending softer tone already evident from late 2025. By contrast, discretionary services spending edged lower, but remained the most resilient of the three major groupings.
Services were not immune to the slowdown, but the pullback was noticeably milder than in discretionary goods or essentials.
Temporary disruptions likely contributed to lower spending but decline is broad based
Severe winter weather, including large storms late in the month, likely disrupted spending across parts of Canada. In Ontario, for example, card spending fell sharply on peak storm days before rebounding shortly afterward. This pattern suggests weather effects distorted the timing of spending rather than fully explaining January’s weakness on a net basis, as softer activity remained relatively broad based across categories.
Housing-related categories, including construction services, posted notable declines, broadly consistent with softer housing resales reported in January.
Several categories tied to everyday and discretionary spending posted larger declines. Grocery spending softened meaningfully, while entertainment and arts spending also cooled at the national level following strong late year performances.
Travel was a notable exception. Growth slowed from December’s pace, but spending didn’t slip into negative territory on a three-month average, suggesting demand remained relatively steady in early 2026.
Regional trends echo national slowdown
January’s slowdown was visible across most regions with provincial trends largely mirroring the national pattern.
In more populous provinces such as Ontario, British Columbia, and Quebec, the drop was somewhat more pronounced, reflecting heavier exposure to discretionary and semi-durable spending categories.
Spending patterns showed a consistent post-holiday retracement across these provinces, particularly, in categories that had peaked during the year-end shopping season.
About the Authors
Abbey Xu is an economist at RBC. She is a member of the macroeconomic analysis group, focusing on macroeconomic forecasting models and providing timely analysis and updates on economic trends.
Rachel Battaglia is an economist at RBC, providing analysis and forecasts for consumer spending trends and provincial economies.
See the archived editions of the Consumer Spending Tracker here.
By Rachel Battaglia and Abbey Xu
December spending snapshot: Canadian cardholder spending remained resilient with RBC’s core retail sales rising 0.7% on a three-month average—down slightly from November—but still marking the 13th consecutive period of growth.
Spending over this critical holiday shopping period for retailers was driven by purchases of discretionary goods, while discretionary services and household essentials were little changed over the last three months.
Holiday season triggers temporary shifts in spending
Discretionary goods spending accelerated 1.7% on a three-month average in December, marginally slower than the 2% gain recorded in November.
Spending gains were concentrated in clothing and apparel as households continued to prioritize tangible gift purchases through year-end.
Boxing day sales outpaced levels a year earlier, potentially benefitting from the weekday timing—it was on a Friday in 2025 compared to a Thursday in 2024.
Other categories, however, revealed where households are cutting back.
Discretionary services remained relatively flat , increasing just 0.1% on a three-month average while cardholder spending on essentials declined outright due to softer spending at grocery stores and gas stations.
Spending on dining declined, continuing a two-quarter slowdown. Household and construction-related spending also weakened just as signs of recovery had emerged.
Entertainment and arts spending fell 0.7%—marking the first pullback in two years after exceptional gains over the prior two months driven, at least in part, by the Toronto Blue Jays’ World Series run.
Regional divergence: Ontario and B.C. maintain spending lead for now
British Columbia and Ontario maintained their positions among spending leaders through December, continuing to outpace the national average year-to-date basis. Their strength in recent months mirrors the broader trend with gains concentrated in apparel and travel.
Atlantic provinces paint a markedly different picture with spending continuing to slow through Q4 from throughout the year, while Quebec and the Prairies occupied middle ground.
While regional spending hierarchies remained relatively stable through the second half of 2025, the shifting economic backdrop will set the stage for potential reshuffling. Decelerating population growth will have differentiated impacts with Ontario and B.C. at risk of population declines.
The absence of further interest rate relief—a tailwind that has not yet dissipated—may also threaten to erode momentum in Ontario and B.C. as spending among these interest-rate sensitive households normalizes.
By Abbey Xu and Rachel Battaglia
November spending snapshot: RBC cardholder purchases in Canada continued to firm as we moved into the holiday shopping season. Core retail sales rose 1.1% on a three-month rolling average in November, up 0.5% from October.
Early signs for Q4 remain positive with spending momentum holding up despite elevated borrowing costs, and still cautious consumer sentiment.
The critical holiday shopping period ramped up with sales of discretionary goods jumping over the Black Friday to Cyber Monday weekend.
Overall, the mix of spending points to Canadian households remaining selective, but responsive, to discount driven sales.
Clothing and travel strengthen while everyday spending lags
All spending categories saw positive growth, but momentum weakened in grocery, entertainment, and arts. Overall, it suggests households continued to prioritize non-essential categories, while keeping everyday needs more contained.
Apparel and related categories posted a notable lift in November after two months of slower growth. Promotional sales around Black Friday and Cyber Monday appear to have encouraged households to stock up ahead of the holiday period. Travel also notched a solid gain following a weaker October.
In contrast, spending on entertainment and arts cooled after a strong boost earlier in the fall, thanks to activity related to the Blue Jays postseason run.
Strong Black Friday weekend sales kicked off holiday shopping
Holiday shoppers returned for the deals this year. Total spending on retail merchandise (excluding gasoline) was up 7.5% from Black Friday to Cyber Monday compared to last year, led by the fastest growth in discretionary goods spending in three years.
Spending on apparel, footwear, and accessories lead gains in discretionary goods. Spending on discretionary services also rose, but by less than the Black Friday weekend a year ago, and growth in essentials’ spending also slowed.
This reflects a value conscious consumer, who remains selective, but is willing to spend when the price is right.
Discretionary goods remain main driver of November spending
Discretionary goods continued to show solid momentum on a three-month rolling average in November. This aligns with the stronger performance seen during the Black Friday and Cyber Monday period, when households are more responsive to promotions and seasonal sales.
Discretionary services and essentials also posted positive growth on a three-month rolling average, though growth in these categories has decelerated from earlier in the year.
Regional divergence: Central provinces lead while Atlantic lags
British Columbia, Ontario, and Manitoba all recorded notable spending growth in November on a three-month rolling average, closely mirroring national consumption trends.
These provinces demonstrated particularly robust growth in clothing spending, similar to the national level.
In contrast, the Atlantic provinces continued to experience declining spending growth, extending October’s downward momentum. Other provinces including Quebec and Saskatchewan continued to post moderate spending growth like the previous month.
By Rachel Battaglia and Abbey Xu
October spending snapshot: RBC cardholder spending held on to September’s momentum in October, reinforcing consumer resilience despite ongoing economic uncertainties. RBC’s core retail sales grew 0.5% on a three-month rolling average basis, showing a solid start to Q4.
The Blue Jays in the World Series provided a notable lift to discretionary spending, particularly in Ontario, underscoring consumer appetite for experiences even amid economic headwinds.
Entertainment spending accelerates amid Jays excitement
RBC cardholder spending remained positive on a three-month moving average basis across all major spending categories we track.
Most of October’s spending strength came from entertainment and arts—a category that has been surging since provincial rules were relaxed around online gambling, expanding consumer accessibility.
But sports games appear to have bolstered the gain in October. Almost all of the increase in entertainment and arts spending came from Ontario, which hosted four of seven World Series games—three taking place in October.
Slower growth emerged in dining—another key segment of discretionary spending—though the moderation follows an impressive pace earlier in the year. In level terms, RBC cardholder spending on dining remains near record highs. Ontario bucked the trend with dining spending among RBC cardholders accelerating in October—a pattern likely influenced by World Series excitement.
Meanwhile, spending on household and construction remains among the weakest categories, likely reflecting subdued homebuying and renovation activity. Nonetheless, we see encouraging signs of life in this category with spending hitting an 18-month high in October after slowly building momentum in recent months.
This uptick coincides with early signs of housing market stabilization, though it remains too early to declare a sustained recovery for this spending category.
Regional trends: Ontario and B.C. cardholders continue to show resilience
Most provinces saw spending increase in October from September, extending gains that have been building throughout the year.
Most East Coast provinces continue to lead spending growth so far this year, though RBC cardholder spending in Ontario and British Columbia remains surprisingly strong, despite significant headwinds. Labour market challenges in Ontario and slowing population growth across both provinces have not dampened consumer spending, pointing to underlying household strength.
We expect pent up demand is playing a role here. Households in Ontario and B.C. carry the highest debt burdens in the country, making them more sensitive to interest rate movements. Consumers in these provinces pulled back more sharply than others during the elevated rate environment of 2023 and 2024. Now that rates have declined, cardholders in these provinces appear to be spending more aggressively as financial conditions ease.
About the Authors
Rachel Battaglia is an economist at RBC, providing analysis and forecasts for consumer spending trends and provincial economies.
Abbey Xu is an economist at RBC. She is a member of the macroeconomic analysis group, focusing on macroeconomic forecasting models and providing timely analysis and updates on economic trends.
By Abbey Xu and Rachel Battaglia
September spending snapshot: RBC cardholder spending regained momentum in September after a softer August, showing resilience after a surprisingly strong Q2 when international trade uncertainty was high. RBC’s core retail sales—which excludes volatile components such as autos and gas (like Statistics Canada’s core measure)—grew 0.7% on a three-month rolling average basis in September, up from 0.2% in August.
The slowdown in August prevented Q3 from matching Q2’s robust performance. This deceleration is consistent with our base case forecast for household consumption to grow slower in the rest of 2025, but enough to enable modest gross domestic product expansion in Q3 despite weakness in the industrial sector.
Q3 spending holds up despite broad moderation
Overall Q3 performance cooled with the slowdown led in part by continued price declines in gas spending as well as softer spending across several categories.
Dining spending grew by a smaller 1.6% in Q3 compared to 7.3% in Q2. Grocery and clothing spending also eased, growing at roughly half the pace from Q2.
Still, underlying positive momentum remained intact. A notable rebound in travel spending and sustained strength in arts and entertainment partially offset moderating growth in other categories.
Per capita spending shows moderation with aggregate trend
Per capita analysis revealed a similar deceleration pattern, suggesting population growth isn’t driving the moderation in RBC cardholder spending.
Canada’s population growth slowed nearly to zero on a seasonally adjusted, annualized basis in Q3. This marks a significant shift from a year ago when population growth was a robust annualized 2.25%. At that time, rapid population growth was masking underlying weakness in the consumer by keeping aggregate spending on the rise.
With that demographic tailwind now largely disappearing, individual spending trends will have greater influence on Canadian GDP. Per capita spending slowed to 1.5% in Q3 from 2.5% in Q2, mirroring the aggregate decline from 2.4% to 1.3%.
Spotlight on spending: Discretionary and essential purchases still rising
Strength in September’s cardholder spending was broad across discretionary services, goods, and essentials, highlighting resilient consumer demand.
Discretionary services maintained the lead on a three-month rolling average despite less spending in dining.
Similar to the aggregate trend, all three major spending categories saw slower growth in Q3.
Sentiment stabilizing but still fragile
There was a gradual recovery in consumer confidence in September, but a divergence in actual household spending and sentiment persists.
The Conference Board of Canada’s Index of Consumer Confidence rose 4.8% in September from the end of Q2, reflecting recovering confidence despite ongoing economic uncertainties. The latest gain wasn’t enough to fully reverse August’s dip, but sentiment remains on firmer footing compared to earlier in the year.
Regional trends: Ontario outperforms as momentum fades elsewhere
Quarterly spending growth decelerated across most provinces in Q3 with Ontario the notable exception.
Cardholder spending in Canada’s largest province accelerated to 2.4% from 1.9% in Q2—well above the national average. The strong performance contrasted with neighboring Quebec where RBC cardholder spending grew just 0.6%—less than half the national pace. Ontario’s gain was relatively broad across categories with the exception of spending at gas stations that continued to contract.
Prince Edward Island (4.4%) and Nova Scotia (3.4%) also notched above the national average, but saw momentum slow from Q2. Strength was fuelled by a rebound in travel spending and outsized growth in entertainment and art. Both provinces hosted music festivals that drew in many visitors.
Saskatchewan was alone with a quarterly decline with spending falling 0.6% with drops in entertainment, arts, and travel after an overall strong Q2.
By Rachel Battaglia
August spending snapshot: RBC’s cardholder data for August shows core retail sales growth slowed from July—marking the third consecutive monthly slowdown in growth based on a three-month moving average.
Core retail sales—which excludes spending on autos and gas—grew 0.4% seasonally adjusted from July, when it rose 1.1%.
This trend aligns with our broader economic outlook . We believe Canada’s economy will resume slow, but positive, GDP growth after a Q2 decline with relatively resilient consumer spending offsetting persistent headwinds in the industrial sector.
Spending moderates in August after strong start to Q3
Solid consumer spending in July hit a bump in August. Total spending1 was down 2.2% m/m from July, reversing the previous month’s gain. Monthly spending data is always volatile, but the three-month moving average also grew more slowly for a third month.
The ongoing contraction in gasoline spending—continuing on a three-month average basis since the elimination of the consumer carbon tax this spring—has been a significant driver of this trend.
Still, most major spending categories saw growth—but slower—apart from clothing purchases, which accelerated. Travel spending dipped 0.1% seasonally adjusted on a three-month average.
Spotlight on spending: Lower gas and grocery spending weigh on essentials
Essential spending has shown a more persistent moderation compared to discretionary categories.
This pattern is largely attributable to the drop in spending at gas stations—which is deemed essential—after the removal of the consumer carbon tax this spring. Spending on groceries has also flatlined since May, which is contributing to lower essentials spending as well.
On a seasonally adjusted, three-month moving average basis, essentials spending contracted 0.6% m/m while other spending categories maintained positive growth.
Slowing spending growth amid cautious sentiment
Consumer confidence measures were little changed from July. The Conference Board of Canada’s Index of Consumer Confidence contracted marginally after four consecutive months of improvement—and remains substantially lower from a year ago.
The Bank of Canada’s Canadian Survey of Consumer Expectations mirrored the same pessimism among survey respondents regarding their spending intentions, and overall financial health. Consumers highlighted elevated job loss concerns were contributing to pessimism.
Despite the pessimistic indicators, consumer spending has remained more resilient than indicators would suggest—continuing to provide underlying support for the economy, even as other sectors face challenges.
Meanwhile, the recent cooling in population growth—after years of record increases that bolstered aggregate consumer spending—likely contributes to the current spending moderation, creating an additional headwind for retail sales beyond weak consumer confidence.
Regional spending trends: Provinces see spending growth slow in August
July marked a strong start to the third quarter across all provinces, aligning with the robust spending patterns observed at the national level.
August was somewhat softer but left most provinces still seeing higher spending on a three-month rolling average basis, albeit at a slower pace.
Saskatchewan and Manitoba experienced the most notable declines, 1.3% and 1.1% month-over-month, respectively, on a three-month moving average, seasonally adjusted basis. Some of this weakness can be chalked up to lower gas spending—which has had a larger impact on inflation and consumer costs in these provinces.
In contrast, the Atlantic provinces demonstrated the greatest spending resilience in August. Consumers in Ontario, meanwhile, have yet to show a meaningful pullback in spending despite being at the centre of Canada’s recent job losses, and bearing the brunt of ongoing trade disruptions with the United States. Our cardholder data is in line with Statistics Canada’s retail sales figures (where available), showing Ontario’s spending continues to track stronger than the national average so far this year.
Rachel Battaglia is an economist at RBC. She is a member of the Macro and Regional Analysis Group, providing analysis for the provincial macroeconomic outlook and budget commentaries.
By Carrie Freestone
RBC’s consumer spending tracking report uses RBC Data & Analytics’ proprietary database of anonymized card transactions by Canadian clients. The data are an accounting of merchant transactions that are divided into various spending categories covering tens of millions of weekly card transactions worth billions of dollars each week. Transactions, both in person and online, are classified into 11 broad spending groups: Dining, Education, Finances, Groceries, Health, Household, Shopping, Transport, Travel, Utilities, and Other. Within each group, the data are further classified: for example, shopping covers merchants classified as clothing stores, hobby shops, electronics stores, and jewelers, among others. We exclude purely financial transactions such as cash advances and insurance from spending.
We examined changes in the value of all transactions in these areas using a 7 day rolling sample starting January 1st of each year that is indexed to pre-covid levels which are calculated as the average spending for the month of February 2020. To examine the impact of seasonal factors, we also show each’s year spending profile which depicts monthly trends in spending. Online spending volumes are estimated based on the presence of an RBC card at the time of the authorization.
Protecting your privacy and safeguarding your personal information is a cornerstone of our organizational ethics and values and will always be one of our highest priorities. The underlying data for this analysis was aggregated based on transaction date, region and merchant category, and cannot be used to identify any individual client or merchant. For additional information please visit www.rbc.com/privacy.
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