Canada’s Retail Sales Fell 0.7% in July. Volumes Fell More
Canadian retail sales fell 0.7% to $73.7 billion in July, and they fell further once prices are taken out of the number: in volume terms, sales dropped 1.1%. Statistics Canada released the retail trade figures at 8:30 a.m. ET on September 24, alongside a separate release showing payroll employment and average weekly earnings both rose in the same month.
The relationship between those two retail numbers is the story. Retail sales are reported in current dollars first, so a print can fall because shoppers bought fewer things or rise because the same basket cost more. When the volume decline is the bigger of the two, the shortfall is not a price effect. Canadians bought less.
Volumes fell more than dollars
Core retail sales, which exclude gasoline stations and fuel vendors as well as motor vehicle and parts dealers, also fell 0.7%. That follows a 1.2% increase in June, so July gave back part of a strong month rather than extending a run of weakness.
Set the volume figure beside prices and the picture sharpens. In the August CPI report, inflation held at 3%. Prices are still climbing at that pace and the quantity of goods moving through Canadian stores shrank. Those two facts together describe real consumption going backwards, which is a different condition from a soft dollar print caused by discounting.
Eight of nine subsectors declined
Sales were down in eight of nine subsectors. General merchandise retailers led the decline at 1.9%, the largest decrease within core retail, after rising 2.5% in June. Clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers fell 1.2%.
Motor vehicle and parts dealers fell 0.8%, their first decline in four months. New car dealers, down 1.3%, led that decrease, while used car dealers rose 2.9%, the largest increase inside the subsector. Gasoline stations and fuel vendors fell 0.9%, a second consecutive monthly decline, and in volume terms gas station sales fell 3.5%.
One core subsector rose. Building material and garden equipment and supplies dealers gained 0.8%, a fourth consecutive monthly increase and the only core gain in July.
Online spending fell harder than the total. Retail e-commerce sales dropped 3.5% to $5.5 billion, accounting for 7.5% of total retail trade against 7.7% in June.
The general merchandise line carries a wrinkle for anyone holding the listed names. The subsector was the weakest in core retail in July, yet Canada’s largest listed general merchandise retailer raised guidance when it reported: Dollarama’s second quarter results. A category aggregate and a single chain can move apart, and this month is a reminder that subsector data is not a read on any one company.
Ontario led the decline, Alberta was the exception
Sales fell in five provinces. Ontario posted the largest decrease in dollar terms at 2.0%, to $27.9 billion, led by general merchandise retailers, and within it the Toronto census metropolitan area fell 4.7%. British Columbia fell 1.4% to $9.8 billion, led by motor vehicle and parts dealers, with the Vancouver CMA down 1.6%. Alberta was the largest provincial increase, up 1.4% to $9.7 billion on higher general merchandise sales.
| Province | July sales | Monthly change |
|---|---|---|
| Ont. | $27.9B | -2.0% |
| Que. | $16.2B | -0.0% |
| B.C. | $9.8B | -1.4% |
| Alta. | $9.7B | +1.4% |
| Man. | $2.5B | -0.4% |
| Sask. | $2.3B | +0.5% |
| N.S. | $2.0B | +0.6% |
| N.B. | $1.6B | +1.6% |
| N.L. | $1.1B | -1.5% |
| P.E.I. | $0.3B | +0.2% |
Source: Statistics Canada, Table 20-10-0056-01, released September 24, 2026. Seasonally adjusted, monthly change.
The income side moved the other way
The second release landed at the same hour and points the other direction. Payroll employment rose 26,100, or 0.1%, in July, following three consecutive increases from March to June totalling 124,200 (0.7%). Year over year, payroll employment is up 171,900, or 0.9%. Job vacancies stood at 501,000, a seventh consecutive month of little variation, and little changed from a year earlier.
Average weekly earnings were $1,347.14, up 3.2% year over year. The provincial spread is wide: Nova Scotia at $1,228.91 was up 5.6% over twelve months and New Brunswick at $1,261.88 up 5.3%, against British Columbia at $1,356.78 (+4.4%), Ontario at $1,391.19 (+3.6%), Alberta at $1,399.61 (+2.5%) and Quebec at $1,279.96 (+1.9%).
More Canadians are on payrolls than a year ago, they are earning more per week, and in July they bought a smaller volume of goods.
The tension heading into October 28
The Bank of Canada’s next decision is October 28 at 9:45 a.m. ET, with a Monetary Policy Report alongside it. The overnight target is 2.25%. As of the September 23 settlement, one-month CORRA futures on the Montreal Exchange implied a rate of 2.37%. That is 11.63 basis points above the current target, or about a 47% chance of a 25 basis point hike. That is a market price rather than a forecast, and it sits close to a coin flip: we set out what would have to be true for it in the market’s case for a Bank of Canada hike.
The two releases pull against each other on that question. Earnings growth of 3.2% and a seventh straight month of stable vacancies describe a labour market that is not loosening. A 1.1% volume decline in retail describes demand weakening in real terms. Neither release settles which of those the Bank weighs more heavily.
Treat the August advance estimate carefully
Statistics Canada’s advance estimate suggests retail sales rose 1.3% in August. The agency’s own caution on it is direct: “Owing to its early nature, this figure will be revised.”
The reason is in the response rate. The advance estimate was calculated on responses from 57.8% of the companies surveyed. The average final response rate over the previous twelve months was 87.1%. Roughly two in five surveyed companies had not yet reported when that 1.3% was produced, so it is a partial count of a month rather than a measurement of it.
Consumer stocks in morning trading
Quotes as of 10:16 a.m. ET on September 24, which are live intraday prices and not closing levels: the S&P/TSX Composite was at 35,667.38, down 0.24%. The listed consumer names barely moved. Dollarama was at $180.82 (+1.36%) and Empire at $47.47 (+0.89%), with Loblaw at $62.16 (+0.37%) and Metro at $90.34 (+0.14%). Canadian Tire was at $187.40 (-0.15%) and Aritzia at $118.30 (-0.88%). Moves of a fraction of a percent have no identifiable cause, and none of these should be read as a response to the retail data.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. All retail figures from Statistics Canada, The Daily, ‘Retail trade, July 2026’, released September 24, 2026, Table 20-10-0056-01. All payroll, earnings and job vacancy figures from Statistics Canada, The Daily, ‘Payroll employment, earnings and hours, and job vacancies, July 2026’, released September 24, 2026, Table 14-10-0223-01. Retail data are seasonally adjusted and in current dollars unless noted as volume terms. Rate expectations are derived from Montreal Exchange one-month CORRA futures (COA) settlement of September 23, 2026, with spot CORRA from the Bank of Canada Valet service. The Bank of Canada decision date comes from the Bank’s own 2026 schedule of policy interest rate announcements. Share prices are live intraday Toronto quotes in Canadian dollars recorded at 10:16 ET on September 24, 2026, not closing levels.
