Statistics Canada said retail sales across the country fell 1.8% to $57 billion in December as the Omicron variant of COVID-19 disrupted retail operations during the busy holiday period.
The agency said sales were down in eight of 11 subsectors, representing 62.9% of retail trade.
Sales at clothing and clothing accessories stores were down 9.5% while furniture and home furnishings stores recorded an 11.3% drop in sales.
Statistics Canada said core retail sales, which exclude gasoline stations and motor vehicle and parts dealers, decreased 2.4%. In volume terms, retail sales were down 2.5% in December.
Statistics Canada said its preliminary estimate for January pointed to an increase in retail sales of 2.4% for the month, but it cautioned the figure could be revised in coming weeks.