Canada Retail Sales Rise 1.5% in June, July Drop Expected

Canada's retail sales rebounded strongly in June 2025, rising 1.5% to C$70.25 billion, driven mainly by increased spending on food and beverages and broad gains across all retail subsectors. Excluding automobile and parts dealers, core retail sales grew by 1.9%, surpassing analyst expectations. However, early estimates from Statistics Canada indicate a 0.8% decline in retail sales for July, though this figure is preliminary and subject to revision. Despite the anticipated slowdown, other indicators, including consumer spending tracked by Royal Bank of Canada, suggest moderate growth may continue as labor markets stabilize and consumer confidence improves. The easing of trade tensions with the U.S. has slightly reduced the number of Canadian businesses affected by tariffs, though challenges such as price increases and supply chain delays persist. Overall, retail sales remain a key component of Canada's economic growth, reflecting resilience amid ongoing uncertainties.