Retail sales across Canada rise 0.6% in June, but July shows early signs of slowdown

Canadian retail sales rose 0.6% to $74.3 billion in June, according to Statistics Canada, boosted by strength in general merchandise and clothing sectors. However, a preliminary estimate for July suggests a potential slowdown ahead.

Core retail sales, which exclude gasoline stations and motor vehicle dealers, climbed 1.2% in June — the second consecutive monthly gain. General merchandise retailers led the increase with a 2.7% rise, followed by clothing, accessories, shoes, jewelry and leather goods retailers, which gained 3.1%. In volume terms, overall retail sales increased 1.5% in June, while core retail sales rose in the second quarter overall, up 2.2% for the three-month period.

Geographically, sales increased in seven of 10 provinces. Ontario saw the largest provincial gain in dollar terms at 1.6%, led by general merchandise retailers. In the Toronto census metropolitan area, retail sales surged 3.9% — the strongest regional performance reported. Quebec posted a 0.5% increase, with Montreal's CMA up 1.0%. Alberta experienced the largest provincial decline at 1.3%, driven by lower gasoline station sales.

The only weakness in core retail came from food and beverage retailers, which fell 0.4% in June after gaining 0.8% in May. Supermarket sales specifically dropped 0.6%. Motor vehicle and parts dealers rose 1.0%, with new car sales up 1.5%, though used car dealers fell 2.4%. Gasoline stations saw the largest overall decrease at 4.1%, posting their first decline in four months — though in volume terms those sales actually rose 4.2%.

Retail e-commerce sales increased 9.9% to $5.7 billion in June, accounting for 7.7% of total retail trade, up from 7.1% in May. Statistics Canada's preliminary estimate for July, based on partial survey responses, suggests retail sales may have declined 0.8% — though the agency cautioned this early figure will be revised as more data arrives.