Surprising Drop in Retail Sales Revealed for June – Find Out the Latest Numbers Now!

As the sun rose on the hopeful month of June, Canadians found themselves grappling with the harsh realities of high interest rates that cast a shadow over retail sales.

1. Retail sales dropped by 0.3% to $65.7 billion, with new car dealers taking the brunt of the hit.
   • Sales at motor vehicle and parts dealers fell by 2.1%.
   • Sales at new car dealers dropped by 2.9%, while used car dealers experienced a decline of 0.6%.
2. The decline in sales can be attributed to a software glitch at car dealerships impeding vehicle sales, but the broader financial obstacles faced by consumers also played a significant role.
   • Bank of Montreal economist Shelly Kaushik highlighted that consumers faced difficulties in the second quarter due to elevated interest rates.

The Bank of Canada responded to this economic downturn by lowering its key interest rate to 4.75%, marking their first rate cut since March 2020. Following suit, July saw another rate cut to 4.5%.

1. Despite the software hiccup in the automotive industry, economists like Katherine Judge of CIBC Economics noted that the fall in retail sales highlighted the ongoing challenges faced by consumers.
   • Discretionary categories like sporting goods/hobby/miscellaneous saw a decrease of 0.8%.
   • Gas station sales also dipped by 0.5% due to lower fuel prices.

Housing-related retailers were particularly hard hit, with building material and furniture sales dropping significantly from the previous year.

1. Core retail sales, excluding certain sectors, experienced a slight increase of 0.4% in June.
   • Food and beverage retailers, especially supermarkets and grocery stores, witnessed a growth of 1.2%.
   • Overall retail sales by volume increased by 0.1% during the month.

Looking towards the future, there is cautious optimism as Statistics Canada’s advance estimate for July hinted at a 0.6% increase in retail sales. However, economists like Kaushik stressed that it would take time to observe a substantial recovery despite the easing of monetary policy.

In the wake of June’s retail sales decline, Canadians are navigating a challenging economic landscape, with hopes pinned on a revival in consumer spending in the months to come.