OTTAWA — Canadian retail sales fell in July on lower sales at food and beverage stores and at building material and garden equipment stores, even as economic restrictions meant to curb the spread of Covid-19 continued to ease.
Retail sales declined 0.6% in July to a seasonally-adjusted 55.8 billion Canadian dollars, or the equivalent of $43.69 billion, Statistics Canada said Thursday. The data agency had previously estimated that July retail sales would fall by a steeper 1.7%.
In the previous month, retail sales advanced 4.2%.
In volume, or price-adjusted, terms, retail sales decreased 1.1% in July.
Statistics Canada added that its early indicators for retail sales in August suggest an increase of 2.1%, though it cautioned that figure could be revised.
In a separate release, the data agency said it estimates wholesale transactions rose 0.5% in August.
The August estimates for retail and wholesale trade suggest the economy should pick up steam in that month after a string of disappointments, including an unexpected decline in gross domestic product during the second quarter.
“With only a modest pullback in retail sales in July, a rebound in August, and surging spending on services, the economy will be driven by consumer spending growth in the third quarter,” CIBC Capital Markets economist Royce Mendes said.
Retail sales at food and beverage stores dipped 3.4% in July, corresponding with the easing of Covid-19 restrictions on restaurants and bars across much of the country and suggesting consumers were spending more money dining out on patios and in restaurants and less on groceries. Sales in the building material and garden equipment and supplies category fell 7.3% in the month for their fourth consecutive decline, although they remain above pre-pandemic levels.
Excluding the automotive sector, retail sales fell 1.0% in July.