Canadian retail sales drop for the first time in almost a year

Canadian consumers pulled back on spending in July, a slowdown after stronger sales during the first half of the year.

Retail sales fell by 0.7 per cent monthly to $73.7 billion in July, the first drop since December 2025, according to data from Statistics Canada published on Thursday morning. The decrease followed a 0.6 per cent rise to $74.3 billion in sales in June.

In volume terms, retail sales decreased by 0.7 per cent in July.

The declines were broad-based, with eight out of nine subsectors posting declines. The largest decrease was observed among general merchandise retailers, which were down by 1.9 per cent in July after increasing by 2.5 per cent in June.

Shoppers also spent less at motor vehicle and parts dealers, as well as at gasoline stations and vendors. Sales in these two subsectors fell by 0.8 per cent and 0.9 per cent, respectively, in July. In volume terms, sales at gasoline stations and vendors fell by 3.5 per cent.

Building material and garden equipment and supplies dealers posted the only increase, with sales rising 0.8 per cent.

Core retail sales, which exclude gasoline and fuel vendors along with motor vehicle and parts dealers, fell by 0.7 per cent in July.

Flash estimates do not suggest an early sign of a long-term slowdown. Statistics Canada officials forecast retail sales increased by 1.3 per cent in August, but that number may be revised due to its early nature.