Canada Retail Sales Research Brief

June sees broad-based increase in consumer spending. After a 1.2 per cent monthly drop in May due to the end of tariff front-loading, retail sales rebounded by 1.5 per cent in June. With prices flat in the month, June’s gain was entirely driven by an increase in volumes. Consumer spending was also broad-based. Not only were sales up in all nine retail categories, but core sales – which exclude auto and gasoline – grew by 1.9 per cent. Nevertheless, growth overall this year has slowed, and the outlook is murky. After seeing a 6.0 per cent increase in retail sales over the second half of last year, spending has since slowed to just 1.3 per cent over the first six months of 2025. Preliminary estimates for July also indicate a 0.8 per cent monthly decline. While household consumption has held resilient so far this year, uncertainty due to trade tensions, combined with tighter immigration, appears to be curbing some momentum within the retail sector.