Retail sales increased 1.5% to $70.2 billion in June. Sales were up in all nine subsectors and were led by increases at food and beverage retailers, according to a report release Friday by Statistics Canada.
Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were up 1.9% in June. In volume terms, retail sales increased 1.5% in June. Retail sales were up 0.4% in the second quarter. In volume terms, quarterly sales increased 0.7%, explained the federal agency.
“Feedback from respondents for June highlighted the effects of trade tensions between Canada and the United States on Canadian retail businesses. Supplementary questions asked to respondents show that 27% of retail businesses were impacted by the trade tensions in June, compared with 32% in May. The most common impacts in June were price increases, change in demand for product and delays in the supply chain,” added Statistics Canada.
It said core retail sales increased 1.9% in June on higher sales at food and beverage retailers (+2.3%), with all four store types within this subsector posting gains. The subsector’s increase was led by higher receipts at supermarkets and other grocery retailers, which were up 1.8% in June following a decline of 0.6% in May. Higher sales at beer, wine and liquor retailers (+4.3%) and convenience retailers and vending machine operators (+5.3%) in June also contributed to the increase at food and beverage retailers.
Higher sales were also recorded at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (+5.1%) and general merchandise retailers (+1.6%) in June, it added.
“Sales at gasoline stations and fuel vendors (+1.8%) increased in June after three consecutive monthly declines. In volume terms, sales at gasoline stations and fuel vendors increased 2.7%,” said Statistics Canada.
“Following a decline of 3.4% in May, sales at motor vehicle and parts dealers edged up 0.2% in June. The increase was led by higher sales at new car dealers (+0.1%) and automotive parts, accessories and tire retailers (+1.1%). The sole decrease in the motor vehicle and parts dealers subsector came from other motor vehicle dealers (-0.1%).”
“On a seasonally adjusted basis, retail e-commerce sales decreased 1.7% to $4.2 billion in June, accounting for 5.9% of total retail trade, compared with 6.1% in May.
“Statistics Canada is providing an advance estimate of retail sales, which suggests that sales decreased 0.8% in July. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 54.7% of companies surveyed. The average final response rate for the survey over the previous 12 months was 90.1%.”
Andrew Grantham, Senior Economist, CIBC Capital Markets, said retail sales have been on a bumpy ride since the start of the year, but through the monthly volatility sales volumes are little changed relative to where they stood in December 2024 (+0.2%).
“This is consistent with a generally more cautious attitude among consumers to spending amid tariff uncertainty, particularly compared to the solid growth seen during the second half of 2024, and isn’t the sort of consumer spending that should worry Bank of Canada policymakers from an inflation point of view as they debate whether to cut interest rates further,” he said.
Shelly Kaushik, Senior Economist, BMO Capital Markets, said: “Consumer spending looks to have picked up in June, though it seems momentum was short-lived heading into the second half of the year. Even so, the big picture suggests consumers are holding up despite ongoing labour market slack and elevated trade uncertainty.”
Maria Solovieva, Economist, TD Economics, said retail sales matched expectations at the headline level but surprised to the upside in core categories.
“This indicates that auto-driven gains seen in the spring now lost momentum. On a quarterly basis, real retail sales posted a respectable 3.1% annualized gain with June’s strength leaving core sales as the main driver of the topline tally,” she said.
“Consumer spending held up better than we previously expected and we now see real spending tracking 1.2% in the second quarter (quarter-on-quarter, annualized). However, as the advance estimate indicates, momentum is likely to cool in Q3. With employment growth slowing and trade tensions clouding the outlook, there is little for the average Canadian household to get excited about.”
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