Canadian retail sales rise less than expected in July
Retails sales increased 0.4 per cent in July, the first advance in three months, as consumers spent more on new cars, Statistics Canada said Friday from Ottawa. The gain trailed economist expectations for a 0.6 per cent increase. Excluding motor vehicles and gasoline, retail sales fell 0.1 per cent on the month.
The report falls short of economist expectations for a larger rebound and may suggest higher debt servicing costs are hindering consumer consumption. Debt service costs reached a record in the second quarter, leaving consumers with less money in their wallets to spend on other goods.
In volume terms, which strip out the effects of price changes, July sales were flat on the month and the year, which echoed the second-quarter gross domestic product report that showed consumption has been weak. Year to date, volumes have increased 0.8 per cent, slightly less than the 0.84 per cent last year and the slowest pace of growth since 2009, the agency said.
The lacklustre showing for retailers “leaves the Canadian economy more dependent on trade and capital spending, with both seen as vulnerable to a global slowdown,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in a note to clients.
Canada’s currency fell 0.2 per cent after the release, trading at $1.3286 against the U.S. dollar at 8:45 a.m. Toronto time.
How would you describe your spending habits now compared to a year ago?
- Friday’s retail sales data may heighten concern about the degree to which debt service costs, which reached a record in the second quarter, are eating into disposable income, and call into question how much Canada can continue to rely on consumers to fuel new economic growth.
- Cannabis store sales were up 14.3 per cent in July driving an uptick in miscellaneous store retailers
- Ontario reported the largest increases in retail sales of any province, up 1.2% in July; sales in five other provinces rose: Alberta, Saskatchewan, Manitoba, Newfoundland and Nova Scotia
- Sales at motor vehicle and parts dealers advanced 1.5 per cent in July, the largest gain in five months, due primarily to new car consumption
- E-commerce sales accounted for 3.2 per cent of total retail trade in July, up 32.8 per cent on the year
- Health and personal care stores reported higher sales for the fifth time in six months; food and beverage stores rose 0.6 per cent led by higher receipts at supermarkets.
- June’s flat retail sales was revised slightly lower to a decline of 0.1 per cent
--With assistance from Erik Hertzberg.