Canadian Retail Sales Fall 0.7% in July 2026

Canadian retail sales fell 0.7% to $73.7 billion in July 2026, marking the first decline since December 2025. According to Statistics Canada, the drop was broad-based, affecting eight of nine subsectors. General merchandise retailers experienced the steepest decline at 1.9%, while building material and garden equipment dealers were the only subsector to grow, recording a 0.8% increase.

Regional data highlighted significant weakness in Ontario, where sales fell 2.0%, and Toronto, which saw a 4.7% decline. E-commerce sales also dropped by 3.5%. Economists attribute the pullback to inflation in groceries and housing, alongside higher gasoline prices, which eroded discretionary spending power. Core retail sales, excluding motor vehicles and gasoline, mirrored the overall trend with a 0.7% decrease.

Preliminary advance estimates from Statistics Canada indicate a 1.3% rebound in August, though this figure remains subject to revision. Analysts warn that near-term momentum may be hindered by elevated energy costs and economic uncertainty following the implementation of Section 338 tariffs in August.