Canadian retail sales edged up in June, largely due to a slight increase in auto sales, according to data released by Statistics Canada on Friday..
Overall, retail sales increased by 0.1% in June compared to May, after declining by 0.6% in the previous month. This increase was slightly above market expectations, as analysts had predicted a 0.2% decline..
The gain in retail sales was primarily driven by a 2.9% increase in sales at motor vehicle and parts dealers. This increase was likely due to pent-up demand following the easing of COVID-19 restrictions and supply chain disruptions..
Excluding the automotive sector, retail sales actually declined by 0.5% in June. This decline was led by a 4.4% drop in sales at gasoline stations, as fuel prices continued to rise..
Other sectors that saw declines in sales in June included clothing and accessories stores (-1.3%), furniture and home furnishings stores (-1.1%), and electronics and appliance stores (-0.9%)..
Despite the slight increase in June, retail sales remain well below their pre-pandemic levels. In June, retail sales were still 0.5% lower than in June 2022 and 1.3% lower than in February 2020, before the pandemic hit..
The weak trend in retail sales suggests that consumers are still being cautious with their spending amid rising inflation and interest rates. This is likely to weigh on consumer spending in the coming months, which could have implications for the overall economic recovery..
In terms of provinces, retail sales increased in six provinces in June, with the largest gains seen in Alberta (+1.3%), British Columbia (+0.9%), and Quebec (+0.8%). The only provinces to see declines in retail sales were Ontario (-0.3%) and Nova Scotia (-0.2%)..
The increase in retail sales in Alberta was largely due to a 4.6% increase in sales at motor vehicle and parts dealers. In British Columbia, the gain was driven by a 2.5% increase in sales at food and beverage stores. And in Quebec, the increase was driven by a 1.7% increase in sales at clothing and accessories stores..
The decline in retail sales in Ontario was led by a 3.1% decrease in sales at gasoline stations. In Nova Scotia, the decline was driven by a 2.1% decrease in sales at food and beverage stores..
Overall, the retail sales data for June shows a mixed picture. While there was a slight increase in overall sales, this was largely due to a boost from auto sales. Excluding the automotive sector, retail sales actually declined, suggesting that consumers are still being cautious with their spending. This trend is likely to continue in the coming months, as inflation and interest rates remain high..
