Retail sales decreased 0.8% to $69.6 billion in July. Sales were down in eight of nine subsectors and were led by decreases at food and beverage retailers, reported Statistics Canada on Friday.
Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—were down 1.2% in July. In volume terms, retail sales decreased 0.8% in July, said the federal agency.
“Following an increase of 2.2% in June, core retail sales fell 1.2% in July on lower sales at food and beverage retailers (-1.3%). This subsector’s decrease was led by lower receipts at supermarkets and other grocery retailers, which were down 2.5% in July following an increase of 2.6% in June. Beer, wine and liquor retailers (+3.2%) were the only store type within this subsector to post an increase in July,” explained Statistics Canada.
“Lower sales were also recorded at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (-2.9%) in July. Clothing and clothing accessories retailers (-3.2%) led the decrease in this subsector.”
On a seasonally adjusted basis, retail e-commerce sales increased 2.2% to $4.3 billion in July, accounting for 6.1% of total retail trade, compared with 6.0% in June, it said.
“Statistics Canada is providing an advance estimate of retail sales, which suggests that sales increased 1.0% in August. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 50.1% of companies surveyed. The average final response rate for the survey over the previous 12 months was 89.6%,” said the report.
Shelly Kaushik, Senior Economist, BMO, said: “While the July retail sales figures were soft, a decent August suggests Canadian consumers didn’t stay down for long. Despite ongoing trade uncertainty and further weakening in the labour market, the economy looks to be on track for a modest recovery to start the third quarter.”
Maria Solovieva, Economist, TD, said: “Volatility in the data remains exceptionally high, however nominal sales in Q3 are now tracking 1.1% annualized growth despite July’s outsized weakness.
“Cooling employment and softer wage gains are likely to catch up with consumers in Q3, reinforcing a more frugal mindset. While wealth effects could continue to buoy services spending among higher-income households, another leg up in domestic tourism and related spending appears unlikely. Goods demand, meanwhile, looks set for a sizeable contraction, with vehicle sales likely to pull back in in the third quarter.”
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