Canada’s retail sales dropped in July. On a sequential basis, the retail sales fell 0.4 percent. The data for June was downwardly revised to a fall of 0.1 percent from 0 percent. Consensus expectations were for a rise of 0.6 percent. Excluding price effects, the picture was soft, with volumes effectively flat on the month.
Of the 11 major categories, sales dropped in six. Autos positively contributed the most to the overall headline figure, with sales at motor vehicle and parts dealers up an impressive 1.5 percent, mainly driven by new vehicle sales. Sales at health and personal care stores and food and beverage stores were also solid.
In the meantime, lower sales at building material and gardening equipment stores, clothing stores and general merchandise stores gave some offset. Stripping the volatile autos and gasoline categories, sales dropped 0.1 percent.
Region wise, six provinces out of 10 recorded a rise in retail sales in July. Ontario led the way, recording a rise of 1.2 percent. Meanwhile, sales came in soft in Quebec and British Columbia.
“The release leaves our Q3 GDP unchanged tracking at 1.1 percent (annualized). Overall, Canadian retail sales (especially volumes) have continued to move sideways for more than a year now, and July's report doesn't change that narrative much”, said TD Economics in a research report.
