Facing sky-high inflation, consumers put away their wallets more often in July, new data revealed Friday, as retail sales fell for the first time since 2021.
Canadian retailers ranked up $61.3 billion in sales in July, Statistics Canada reported Friday. That’s a decline of 2.5 per cent from the previous month’s level as lower sales at gas stations and clothing stores led the way down.
Sales at gas stations fell by 14 percent. A big part of that was lower prices for the fuel itself, but even in volume terms sales were down by seven percent. Fewer people were filling up during the month, which was in keeping with the vehicle segment overall as auto sales edged down 0.5 per cent. Both new and used car dealers reported declines.
Consumables like food and drink also weren’t flying off the shelves, as supermarkets and grocery stores saw sales slip by 0.9 per cent, while liquor stores saw a decline of 1.2 per cent.
“The trend is clear, consumers are pulling back on spending,” economist Royce Mendes with Desjardins said. “The slowdown in consumption is exactly in line with what the Bank of Canada is trying to engineer with its rate increases.”
CIBC economist Karyne Charbonneau also linked the spending slowdown to the central bank’s recent moves, saying in a note to clients that “Canadians may have started to react to higher interest rates.”