Canadian retail sales inched higher in January, with in-store rising and ecommerce coming off its pandemic peak, according to the latest Mastercard SpendingPulse numbers.

The Pulse measures in-store and online retail sales (excluding automobile) across all forms of payment.

Year-over-year, January in-store sales are up 3% while, concomitantly, ecommerce sales growth is tapering off, down 11.1% year-over-year. Ecommerce, however, has experienced a 72% sales growth from January 2020 levels, prior to the pandemic.

Canadians continue to seek entertainment outside of the home, according to the SpendingPulse report, including travelling and dining out, which is reflected by an increase in restaurant spending, up 55% year-over-year, and fuel/convenience, up 11.2% year-over-year.

According to Steve Sadove, senior advisor for Mastercard, retail sales in Canada are stabilizing as consumers continue to spend on passion areas like travel, live entertainment and dining. These numbers are consistent with a broader shift in consumer spending towards experiential activities.

The jewelry and apparel sectors are experiencing growth as retailers prepare to launch Spring collections and offered extended winter sales to clear out remaining inventory. Apparel was up 13.7% year-over-year, with jewelry and leather goods up 13.6%. However, apparel remains the only sector to not have recovered from pre-pandemic spend levels: sales growth is still down 10.5% from 2020.

Consumer spending is slowing in the home improvements sector (down 11.9% year-over-year) and furniture and home furnishings (down 6.5% year-over-year) as experiential spending is being prioritized over home enhancements projects. Electronics sales also slumped in January, down 7.8% year-over-year.

Mastercard North American chief economist, Michelle Meyer, points out that consumers are becoming more selective with discretionary purchases “transitioning their focus from larger buys in sectors such as electronics, to smaller buys driving up sales in apparel, for instance, along with experiences.”