Canada’s Retail Sales Decline 0.7% in July 2026 with Preliminary August Rebound Indicated

Canada’s retail sales fell by 0.7% in July 2026 to C$73.7 billion, marking the first monthly decline since December 2025, according to Statistics Canada. This drop followed a 0.6% increase in June and was driven primarily by weaker sales at general merchandise retailers, which saw a 1.9% decrease. These stores, which offer a wide range of goods including groceries, clothing and electronics, contributed significantly to the overall decline.

Sales decreased in eight of the nine retail subsectors measured. Motor vehicle and parts dealers experienced a 0.8% drop, largely due to a 1.3% decline in new car sales, while gasoline stations and fuel vendors saw sales fall by 0.9%. In contrast, building material and garden supply stores were the only subsector to post growth, increasing sales by 0.8% for the fourth consecutive month.

When adjusted for inflation, retail sales volume declined by 1.1% in July, indicating that the real decline was more pronounced than the nominal figures suggest. Provincially, Ontario recorded the largest decrease with a 2.0% drop, led by a 4.7% decline in Toronto’s retail sales. British Columbia also saw a 1.4% decrease, mainly from motor vehicle and parts dealers. Alberta stood out as the only province with growth, posting a 1.4% increase in retail sales.

Statistics Canada’s advance estimate for August suggests a 1.3% rebound in retail sales. However, this figure is preliminary and based on responses from only 57.8% of surveyed retailers, compared with an average final response rate of 87.1% over the past year. As such, the August data is subject to revision and should be interpreted cautiously.

Overall, the July dip signals some softness in Canadian retail activity, but early indications from August hint at a possible recovery. Analysts and market watchers will be monitoring upcoming data releases to assess whether this bounce in sales will be sustained in the coming months.