Canada Retail Sales Research Brief

Households continue to monitor spending. Retail sales in Canada edged down 0.3 per cent in June. This marked the fifth monthly contraction in the past six months, as restrictive borrowing costs continued to weigh on household spending. When accounting for inflation, sales were essentially unchanged, translating into a 0.7 per cent annualized contraction in the second quarter. However, total sales were still up 0.2 per cent year over year in June amid still-heightened population growth of 3.2 per cent annually as of the start of the second quarter. In addition, with the Bank of Canada cutting its key policy rate for the first time in June, flash estimates for July point to a 0.6 per cent monthly increase in total sales, setting the stage for a better third quarter as consumers experience some interest rate relief. Combined with robust population gains and limited retail supply growth, the property sector’s long-term outlook remains optimistic.