Canadian retail sales increased 1.1% to $63.1 billion in June, boosted by higher sales at gasoline stations and motor vehicle and parts dealers, Statistics Canada said Friday.
However, the agency said its preliminary estimate for July suggests retail sales for that month fell 2%, though it cautioned the figure would be revised.
Bank of Montreal economist Shelly Kaushik said retail spending had a surprisingly strong June, though much of the headline strength was due to higher prices as volumes were sluggish.
Retail sales in volume terms gained 0.2% in June.
"Still, it looks like retail sales will add to growth in the second quarter. However, the flash estimate for July points to a weaker start to Q3," Kaushik wrote in a report.
For June, sales at food and beverage stores fell 1.1% in June as sales at supermarkets and other grocery stores dropped 0.8% and beer, wine and liquor stores lost 2.9%.
Higher prices helped lift sales at gasoline stations 3.9% for the month even as sales at gasoline stations in volume terms fell 1.3%.
Meanwhile, sales at motor vehicle and parts dealers gained 1.8% in June, boosted by a 2.9% gain at new car dealers. Sales at used car dealers gained 1.7%.
Core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — rose 0.2%.
General merchandise stores gained 1.1% for June, while clothing and clothing accessories stores rose 1.8%, helped by a 2.1% gain at clothing stores and a 2.4% increase at jewelry, luggage and leather goods stores.