Retail sales soar as Canadians embark on shopping sprees during reopening
Canadian retail sales rebounded strongly in June as consumers flocked to physical stores after a long period of closures linked to the pandemic. However, preliminary data for July suggests the momentum may only be temporary.
Retail sales jumped 4.2% to $ 56.2 billion in June, according to Statistics Canada, as activity increased in eight of 11 subsectors. Core retail sales, which exclude volatile sales such as gasoline stations and auto and parts dealers, rose 4.6%.
As restrictions on non-essential retailers were lifted, sales at clothing and clothing accessories stores climbed 49.1%, after two consecutive months of decline. Likewise, sales at general merchandise stores rose 7.4%, while sales at motor vehicle and parts dealers jumped 2.7% in June. In contrast, sales at food and beverage stores fell 2.6%, while sales at building material and garden equipment and supplies dealers fell 3.1%.
Despite the strong rebound in retail sales in June, it appears that the optimism was short-lived. Retail sales fell 1.7% in July, according to Statistics Canada flash estimates, suggesting consumers are shifting their spending habits from goods to services as the economy continues to reopen. “Canadians have probably started to replace purchases of goods with services. And even with July’s pullback, retail sales are still well above pre-COVID levels, ”CIBC economist Royce Mendes said.
Information for this information session was found through Statistics Canada. The author has no title or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author does not hold any license.