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Statistics Canada reports retail sales up 0.1% in June at $65.9 billion

Food and beverage retailers saw a drop of 0.9%
8/23/2023

Statistics Canada says retail sales rose 0.1% to $65.9 billion in June, lifted by sales at new car dealers.

The agency says core retail sales which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers fell 0.9% in June.

Retail sales rose in three of the nine subsectors, led by a 2.5% gain at motor vehicle and parts dealers as sales at new car dealers added 2.9%. Sales at gasoline stations and fuel vendors rose 0.3%, lifted by higher prices at the pump in June.

"Canadian consumer spending continued to sputter in June,'' Tiago Figueiredo, an economist at Desjardins, said in a note to clients.

He added the numbers indicate weaker economic growth going forward, in line with what the Bank of Canada is expecting.

Desjardins is estimating GDP rose 1.4% in the second quarter, slightly below the central bank's forecast of 1.5% growth.

Sales at general merchandise stores fell 1.4% and food and beverage retailers saw a drop of 0.9%.

In volume terms, retail sales fell 0.2% in June.

With the underlying weakness in the retail sales report, Maria Soloviena, an economist with TD Economics, says consumer spending might regain its footing with the government's grocery rebates credited to about 11 million Canadians in July.

Statistics Canada says its early estimate for retail sales in July points to a gain of 0.4% for that month, though it cautioned that the figure would be revised.

Katherine Judge of CIBC Economics says she's forecasting a final quarter-point hike in September from the Bank of Canada but says that could change if preliminary estimates for July GDP look weak enough.

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