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Canadian Tire is a retailing giant in Canada with several banners that offer some insight into the health of the consumer.
The company reported earnings today and it painted a picture of a sluggish consumer.
- Same store sales at the flagship store up 1.1% vs +2.9% consensus
- In Q4 essential items up 4.2% but discretionary items -2%
- In the 2024 year, discretionary fell 5%
- Mark’s +1.8% vs +2.6% consensus
- Sport Chek +0.4% vs +2.3% consensus
There was a pick-up in December that the company highlighted on and that may have coincided with the GST holiday.
Greg Hicks, President and CEO said they are “observing economic green shoots” on sentiment and spending but also said “consumer demand remained constrained in discretionary categories.”
The Canadian December retail sales report is due on Fri, Feb 21 (with advance January numbers).
I also gather than Canadians are very disturbed by all the tariffs talk from the US and that could reverberate in later months.
In the broader Canadian economy, trucking group Mullen also highlighted challenges, citing “very challenging market conditions.”
“Not only was demand soft, but
pricing pressures intensified, due to undisciplined competition,” said Murray Mullen, Chair and Senior Executive Officer. “From a demand perspective, I do not believe that 2025 will be any better than last year. The Canadian economy remains rangebound, at best, with downside
risks emerging due to the potential for trade disruptions between Canada
and the U.S. And, when you couple trade disruptions along with
the fact that Canada is lagging in terms of capital investment, the
only conclusion that I come to is that the demand for freight services
will continue to underwhelm.”