Faced with soaring inflation, consumers are shedding their wallets more often in July, new data showed on Friday, as retail sales fell for the first time since 2021.
Canadian retailers recorded sales of $61.3 billion in July, Statistics Canada reported Friday. This was down 2.5% from the previous month’s level, as lower sales at gas stations and clothing stores led the drop.
Gas station sales fell 14%. A big part of that was the drop in fuel prices itself, but even in terms of volume, sales were down 7%. Fewer people filled up during the month, consistent with the vehicle segment as a whole, as auto sales edged down 0.5%. New and used car dealers recorded declines.
Consumables like food and drink weren’t flying off the shelves either, with supermarkets and grocery stores seeing sales drop 0.9%, while liquor stores saw a 1.2% decline. .
Weak retail sales figures suggest consumers are starting to put their wallets away in the face of sky-high prices and a bleak economic outlook.
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“This retail sales report was unambiguously weak, suggesting that consumers tightened their purse strings in July,” TD Bank economist Ksenia Bushmeneva said of the numbers. “Consumer demand appears to have largely cooled across most spending categories.”
“Overall, given the triple headwind emanating from rising consumer prices, rapidly rising interest rates and declining wealth, consumers are becoming more frugal,” he said. she declared.