Rising gasoline prices and sales at new car dealerships helped push Canadian retail sales up 2.2% in May to $62.2 billion, but an early estimate from Statistics Canada has indicated a slowing in the pace of sales gains in June.
The May reading topped the agency’s preliminary estimate for the month which had suggested a 1.6% gain, but Statistics Canada said Friday its preliminary estimate for June pointed to growth of just 0.3%.
TD Bank economist Ksenia Bushmeneva said retail sales grew at a healthy pace in May, but the details of the report weren’t as positive.
“Much of May’s gain was due to higher prices, particularly at the pump, and a recovery in auto sales after three months of declines,” Bushmeneva wrote in a report.
Digging deeper into the report, she said a number of categories, such as gasoline, apparel and sporting goods, actually saw sales decline in inflation-adjusted terms.
Statistics Canada said core retail sales – which exclude gasoline stations and motor vehicle and parts dealerships – rose 0.6% in May, while overall retail volume sales increased by 0.4% during the month.
“With inflation at its highest level in several decades, rising prices have given nominal retail sales figures a boost. As such, it is becoming increasingly important to look at spending in terms of real or inflation-adjusted,” Bushmeneva said.
Statistics Canada said the overall increase in retail sales in May came as sales rose in eight of the 11 subsectors it tracks.
A 12.0% rise in gasoline prices helped push gas station sales up 9.2% in May, but in volume, gas station sales fell 2.2%.
Meanwhile, sales at motor vehicle and parts dealers rose 3.3%, boosted by a 3.8% rise at new car dealerships, its best performance since February 2021. automobile parts, accessories and tires increased by 5.8% and those of other motor vehicle dealers. gained 1.1%, while used car dealers fell 1.6%.
The rise in core retail sales was led by a 1.9% increase in sales at food and beverage stores, while sales at general merchandise stores rose 1.4%.
Statistics Canada said the biggest drop in core retail sales in May came from a 6.7% drop in miscellaneous retailers, including pet stores, cannabis stores, office supplies and stationery stores.
– The Canadian Press