Canada's retail sales rebound in June as restrictions are eased - TD Bank Financial Group

ActionForex reports that analysts at TD Bank Financial Group provide their views on Canada's June retail sales. 

"Reopening of non-essential stores boosted retail activity in June, with sales rising by 4.2% m/m. June’s growth was a only slightly lower than Statistics Canada’s preliminary estimate of 4.4% m/m. This left sales 3.5% below March level, but 8% above its pre-pandemic (February 2020) level."

"Looking ahead, the agency’s flash estimate suggests that retail activity decreased in July, with sales dropping by 1.7% m/m."

"Sales of motor vehicle & parts rose for the first time since March (+2.7%), and higher prices drove sales of gasoline higher in nominal terms (+6.0%). Gasoline sales also rose in volume terms (+4.7%) consistent with improving mobility trends."

"Core sales, which exclude the two above-mentioned categories, rose even more than the headline (+4.6%)."

"Categories hardest hit by third-wave restrictions led the rebound. Brisk growth was reported for clothing and clothing accessories stores (+49%), and furniture and home furnishing stores (+23%)."

"Retail activity continues to ebb and flow consistent with the tightening and easing of the public health restrictions. As expected, easing restrictions on in-person shopping and falling case counts ushered consumers back to stores in June."

"While consumers have been enjoying their newly found access to stores, they have also started shifting their spending patterns away from goods and toward services such as dining out, recreation, and travel. This transition likely weighed on retail sales in July, as indicated by the decline in the advance estimate. That said, improvement in spending on high-touch services, in addition to robust retail expenditure, bodes well for GDP growth in the third quarter."