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Economic News

Retail Sales: Canadians Hit the Stores in June, but Hit the Brakes in July

August 22, 2025
Florence Jean-Jacobs
Principal Economist

Highlights

  • Retail sales increased by 1.5% m/m in June, in line with consensus and one tick below Statistics Canada’s flash estimate.
  • With retail prices flat in the month, June’s gain was driven by a 1.5% advance in volumes, compensating for May’s nearly equivalent drop in real retail sales (see table for details).
  • Growth was widespread, with all nine subsectors posting advances. Purchases at grocery and convenience stores, as well as clothing and accessories retailers, were especially robust.
  • Sales at motor vehicles and parts dealerships inched up 0.2%, following May’s sharp decline.
  • Retail sales at gas stations were up 1.8%, thanks to strong volume growth.
  • Core retail sales, which exclude autos and gasoline, grew by 1.9%.
  • Most provinces saw retail sales rise in June, led by Ontario (3.2%), but purchases were flat in Quebec.
  • Annualized q/q growth in nominal sales reached 1.8% in Q2, a much more moderate result than the three previous quarters (all above 4%). Volumes were up a more robust 2.8%.
  • Statistics Canada’s preliminary estimate points to a 0.8% decline in July retail sales.

Implications

It’s hard to paint a clear picture of Canadian retail sales so far this year, given monthly ups and downs (graph). But contrasting the first half of 2025 with the second half of 2024 certainly shows more hesitant consumer spending. Uncertainty due to trade tensions, combined with very slow population growth, appears to have weighed on retail sales.

While June’s widespread gains are encouraging, it seems that Canadians didn’t continue this shopping spree in July. Indeed, sales volumes likely contracted in July, since seasonally adjusted goods prices were flat month to month. The 3‑month annualized rate of real retail sales growth is now tracking -3.0%, a difficult environment for retailers to pass along any tariff-related cost increases.

 

In all, recent soft labour market data, the subdued retail picture for July, and well-contained inflation suggest that the Bank of Canada could resume cutting interest rates at its September meeting.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.