Before we dive into today’s topic, here’s a quick update on tariffs. The U.S. President responded to the Supreme Court's invalidation of the sweeping International Emergency Economic Powers Act (IEEPA) tariffs by imposing a new 15% tariff on all countries over the weekend.

Importantly, this presidential action, like the Supreme Court ruling it followed, does not affect existing sector-specific tariffs on items such as aluminum, steel, and auto parts. These specific tariffs were implemented under a different authority (Section 232 of the Trade Expansion Act of 1962). As before, the vast majority of Canadian exports are compliant with the Canada-U.S.-Mexico Agreement (CUSMA) and, therefore, will remain exempt from the newly announced tariffs.

Now, let's focus on some other news. With the December retail numbers now in, today’s Twenty-Four reviews the overall retail spending trends in Alberta over the course of 2025.

Resilient retail sales, but signs of slowing

Overall retail spending in Alberta increased by 4.4% last year, largely meeting our December projection. We observed an initial spike in purchases driven by tariff-related uncertainty in early 2025, but this momentum slowed as the year went on.

While monthly data can be volatile, even after seasonal adjustments, quarterly figures reveal a clear slowdown in spending growth. Spending in the first quarter (Q1) posted a robust 7.0% year-over-year increase, but this slowed significantly to a 2.7% increase by the fourth quarter (Q4) despite reaching an all-time high in November. This trend mirrored the national experience.

New car sales were the main driver

Most retail sub-sectors saw growth last year, with motor vehicle sales alone accounting for over half of the aggregate gain. Although precise drivers are difficult to isolate due to data limitations, several key points are clear: new car dealerships (the largest sub-sector) were responsible for the vast majority (92%) of this increase. This aligns with separate new motor vehicle sales data showing a 4.6% jump in the number of new vehicles (including heavy-duty industrial trucks) sold in Alberta.

Elsewhere, sales at clothing, sporting, jewelry, and book stores climbed nearly 10% from 2024 levels. Other sectors, including general merchandise, health & personal care, furniture & home furnishings and electronics & appliances retailers also posted strong gains. Conversely, revenues for gasoline stations dropped, primarily due to lower prices resulting from the removal of the consumer carbon tax* and lower global oil prices.

The “real” story

Despite the on-again, off-again tariffs with the U.S., nominal retail prices did not appreciate significantly last year, rising only 1.6% from 2024 levels. When adjusted for inflation, real** spending in Alberta increased by 2.7%.

The picture changes when factoring in population growth, given that Alberta has consistently led the country in this regard since 2023. As of 2025, real per capita retail spending in Alberta barely changed from 2024 levels and remained 5.6% below the 2021 peak. However, with relatively low inflationary pressures and an expected significant slowdown in population growth this year, we anticipate an increase in per capita spending going forward.

What to expect next?

Our ATB Mastercard Alberta transaction data suggests a slight uptick in total spending (excluding autos) in January, consistent with the advance estimate of 1.5% for the country as a whole released by Statistics Canada.

Consumer spending remains subject to numerous opposing factors. Growth is supported by lower interest rates, gains in equity markets, and recent improvements in the labour market. Conversely, spending is being constrained by headwinds such as slower population growth, mortgage renewals at higher rates, persistent concerns about the rising cost of living, and continued geopolitical instability. 

Despite these conflicting forces, our December outlook pegged retail spending to grow by another 4.2% this year before accelerating further in 2027.  

*Retail sales data includes any tax added at the point of sale.

**Adjusted for inflation using the national retail price index.

Answer to the previous trivia question: Prior to this year, 2014 was the last time NHL players competed at the Winter Olympics.

Today’s trivia question: How many justices are there on the U.S. Supreme Court?