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Economic News

Canada: June Marks a Six-Month Retail Sales Rally Before a Potentially Softer July

August 21, 2026
Kari Norman
Senior Economist

Highlights

 

  • Retail sales grew by 0.6% m/m in June, besting Statistics Canada’s earlier flash estimate and the survey of economic forecasters (both 0.4%).
  • Growth was broad-based, with seven out of nine subsectors posting advances, and seven provinces registering gains. See table for details.
  • Sales at gas stations saw the largest decrease, down -4.1%—their first decline in four months—thanks to lower prices at the pump as volumes rose.
  • Sales at motor vehicle dealerships, up 1.0%, posted a third consecutive monthly gain. Under the hood, dealerships selling new cars led the increase at 1.5%, while sales at used car dealers fell 2.4%.
  • Core sales, which exclude autos and gasoline, were up 1.2% in June.
  • Excluding price growth, retail sales volumes grew strongly at 1.5% (graph).
  • June closed out the second quarter of 2026, where retail sales grew at an annualized pace of 9.1% q/q. Retail sales volumes increased by a respectable 7.2% in the quarter, for the fourth consecutive quarterly advance and the strongest print since Q2 2022.
  • Statistics Canada’s advance indicator points to a -0.8% m/m decrease in July. Combined with a 0.2% increase in seasonally adjusted CPI goods prices, the flash estimate suggests an even steeper drop in retail volumes.

 

Comments

Despite higher gasoline prices stemming from the conflict in the Middle East, Canadian consumers remained on relatively solid footing through the second quarter.

Much of June’s gain came from general merchandise retailers, potentially reflecting a boost from the FIFA World Cup External link. and the payout of the one-time Canada Groceries and Essentials Benefit External link. during the month. Motor vehicle purchases advanced for a third consecutive month following the reintroduction of EV incentives in February, while spending declined only at food/beverage stores and gasoline stations. More broadly, easing gas prices and employment gains External link. likely provided additional support to household spending.

Implications

Looking ahead, we will continue to monitor the positive factors supporting Canadian consumers against ongoing headwinds, including trade uncertainty External link., the volatile situation in the Strait of Hormuz and slowing population growth External link..

After today’s release, we are forecasting External link. Q2 GDP growth of around 2.8% annualized, in line with but slightly above the Bank of Canada’s 2.5% estimate published in its July Monetary Policy Report. We continue to believe that the Bank will remain on the sidelines for the remainder of the year.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.