Canadian Retail Sales (July 2026)

Canadian retail sales decreased by 0.7 per cent to $73.7 billion in July compared to the previous month. Retail sales were 5.1 per cent higher compared to the same time last year. Moreover, core retail sales, which exclude gasoline and automobile items, also decreased by 0.7 per cent in July. In volume terms, adjusted for rising prices, retail sales fell by 1.1 per cent in July.

Retail sales in British Columbia were down 1.4 per cent in July month-over-month and rose by 1.5 per cent compared to the same time last year. In the CMA of Vancouver, retail sales were down 1.6 per cent from the prior month and were 0.8 per cent below the level of July 2025.

July’s report marks the first month of 2026 in which Canadian retail sales fell, snapping a half-year streak of consumer spending growth after a volatile 2025. Furthermore, August’s preliminary estimate suggests a sharp rebound, indicating that the momentum seen prior to July’s print will continue. Importantly, resilience has also been seen in the broader economy and labour market in recent months, helping to temper previous fears of a deep economic downturn in the face of accumulating headwinds. Nonetheless, those headwinds persist, as the latest swath of bilateral tariffs and increasing pressure on oil refineries worsen the inflationary risks facing the economy.  Looking forward, markets are now pricing in the possibility of more than 2 rate hikes from the Bank of Canada over the medium term. While we anticipate an eventual move back towards a policy rate of 2.75 per cent, its timing depends on whether higher energy prices feed into core inflation and generate broader price pressures on non-energy products.