Retail sales increased 0.9 per cent to $66.4 billion in July. Sales were up in seven of nine subsectors, led by increases at motor vehicle and parts dealers, reported Statistics Canada on Friday.
The report said core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—were up 0.6 per cent in July and in volume terms, retail sales increased 1.0 per cent in July.
“Statistics Canada is providing an advance estimate of retail sales, which suggests that sales increased 0.5 per cent in August. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 52.4 per cent of companies surveyed. The average final response rate for the survey over the previous 12 months was 89.4 per cent,” said the federal agency.
In July, the largest increase in retail sales in July was observed at motor vehicle and parts dealers (+2.2 per cent). Higher sales at new car dealers (+2.3 per cent) led the increase, followed by other motor vehicle dealers (+5.6 per cent). Lower sales at used car dealers (-0.8 per cent) were offset by gains at automotive parts, accessories and tire retailers (+1.0 per cent), said StatsCan.
Sales at gasoline stations and fuel vendors (-0.6 per cent) were down in July. In volume terms, sales at gasoline stations and fuel vendors decreased 1.7 per cent, it said.
“Core retail sales increased 0.6 per cent in July, posting their second consecutive monthly increase. The gain was led by higher sales at food and beverage retailers (+0.8 per cent) and general merchandise retailers (+0.8 per cent). Sales at food and beverage retailers were up on higher sales at supermarkets and other grocery retailers (except convenience retailers) (+1.2 per cent) and, to a lesser extent, specialty food retailers (+2.1 per cent) and convenience retailers and vending machine operators (+0.4 per cent),” explained Statistics Canada.
“Higher sales were also reported at health and personal care retailers (+1.2 per cent) in July. The largest decrease in core retail sales in July came from building material and garden equipment and supplies dealers (-1.4 per cent).
On a seasonally adjusted basis, retail e-commerce sales were up 3.4 per cent to $4.1 billion in July, accounting for 6.1 per cent of total retail trade, compared with 6.0 per cent in June, added the federal agency.
“Today’s rebound in retail sales was led by stronger auto sales, which recovered from an operational setback in June. This was enough to bring three-month average auto sales growth into positive territory for the first time since January. The rest of the categories also told an encouraging story as growth in core sales accelerated on the month, likely driven by strong population. We expect the rebound in durable goods will support growth in goods spending for Q3 resulting in total personal consumption expenditures gain of 1.0 per cent quarter-on-quarter (annualized). See our forecast,” said Maria Solovieva, CFA | Economist, with TD Economics.
“A good start to the quarter is unlikely to sway the odds decisively on whether the Bank of Canada will cut rates by 50 basis points in October. Despite the good news today and another month of projected growth, the downward trend in retail spending per capita is clear. In addition to employment and inflation figures, the Bank’s communication will be critical to watch for any signs of change in the pace of easing.”
Related Statistics Canada Article: Retail sales drop in June: Statistics Canada
