EN 
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.
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.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. The reader is solely liable for any use of the information contained in this document and Royal Bank of Canada (“RBC”) nor any of its affiliates nor any of their respective directors, officers, employees or agents shall be held responsible for any direct or indirect damages arising from the use of this document by the reader. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
This document may contain forward-looking statements within the meaning of certain securities laws, which are subject to RBC’s caution regarding forward-looking statements. ESG (including climate) metrics, data and other information contained on this website are or may be based on assumptions, estimates and judgements. For cautionary statements relating to the information on this website, refer to the “Caution regarding forward-looking statements” and the “Important notice regarding this document” sections in our latest climate report or sustainability report, available at: https://www.rbc.com/community-social-impact/reporting-performance/index.html. Except as required by law, none of RBC nor any of its affiliates undertake to update any information in this document.
