Retail sales fall for the first time this year as consumers begin to tap

Facing skyrocketing inflation, consumers were more likely to put their wallets away in July, new data showed on Friday, as retail sales fell for the first time since 2021.

Canadian retailers had sales of $61.3 billion in July, Statistics Canada reported Friday. That’s down 2.5 percent from the previous month’s level, as lower sales at gas stations and clothing stores led the way down.

Sales at gas stations fell by 14 percent. Much of that was lower prices for the fuel itself, but even in volume terms, sales fell by seven percent. Over the month, fewer people were full, which was in line with the vehicle segment in general as auto sales fell 0.5 percent. Both new and used car dealers reported declines.

Consumables such as food and beverages also didn’t fly off the shelves, as supermarkets and supermarkets saw sales drop 0.9 percent, while liquor stores saw a 1.2 percent drop.

The soft retail sales data suggests consumers are beginning to put their wallets away in the face of skyrocketing prices and bleak outlook for the economy.

“This retail sales report was unequivocally weak, suggesting consumers pulled out their wallets in July,” TD Bank economist Ksenia Bushmeneva said of the numbers. “Consumer demand appears to have cooled down for the most part in most spending categories.”

“Overall, given the triple headwinds coming from higher consumer prices, rapidly rising interest rates and a decline in wealth, consumers are becoming more frugal,” she said.

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