Statistics Canada says sales declined in five of 11 subsectors, representing 55% of retail trade.
Sales at general merchandise stores decreased 2.7%, while sales at supermarkets and grocery stores were down 1.1%. Motor vehicle and parts dealers saw sales grow by 1.6%, the third increases in four months.
“Auto strength wasn’t enough to offset weakness elsewhere,” says Nick Exarhos of CIBC World Market Economics. “The weakness was pretty broad based, with a 4% increase in furniture related spending not enough offset weakness in line items like clothing, general merchandise and food related spending.”
He adds, “Importantly for the GDP reading, retail volumes were flat on the month, suggesting growth isn’t likely to exceed our 3.2% Q3 call. All told a weak release, which should support fixed income and weigh on the loonie.”
Retail sales were down in four provinces in July, with lower sales in Quebec and, to a lesser extent, British Columbia, accounting for most of the decrease.