Canada retail sales up 1.5% MoM in June, likely followed by 0.8% drop in July

Canada retail sales, in nominal terms, increased 1.46% month-over-month in June while core retail sales, which exclude gasoline and auto sales, was up 1.95%. However, Statistics Canada’s advance estimate shows that overall retail sales had likely declined 0.8% in July.

Core retail sales was driven up by higher sales at food and beverage retailers (up 2.3%), clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (up 5.1%) as well as general merchandise retailers (up 1.6%).

In volume terms, total retail sales increased 1.5% and core sales were up 1.25%.

StatCan reported that 27% of the surveyed retail businesses said, in response to supplementary survey questions, that they were impacted by the trade tensions in June, down from 32% in May.

The retail sales data has been quite volatile in recent months as shown by a 1.19% drop in May preceding the sizable rebound in June. The three-month rate of change shows a -0.55% decline between May and July, suggesting underlying deterioration in consumer spending underneath the monthly fluctuations.