Retail sales in Canada increased by 0.6 per cent to $74.3 billion in June, beating expectations, Statistics Canada said Friday.

But initial flash estimate for July suggests sales fell by 0.8 per cent the following month, the first decline in seven months.

Statistics Canada said this figure may be revised.

In June, general merchandise retailers led the gains, rising 2.7 per cent. Seven out of nine subsectors also posted gains that month.

The largest drop in retail sales was at gasoline stations and fuel vendors, which posted a 4.1 per cent decline, the first drop in about four months. In volume terms, however, sales increased by 4.2 per cent in this subsector in June.

Sales at food and beverage retailers were also down by 0.4 per cent. Statistics Canada officials said the decline was led by sales at supermarkets and other grocery retailers, which were down by 0.6 per cent in June following a 0.8 per cent increase in May.

In volume terms, retail sales increased by 1.5 per cent in June.

Sales gains in June were broad-based which economists said was welcome news.

“The breadth of this report was even more impressive than the headline,” wrote David Rosenberg of Rosenberg Research and Associates in a note Friday.

Rosenberg said the rise in sales in June and slump in July could be attributed to the FIFA World Cup and similar moves were seen in the United States, Canada’s co-host to the global soccer tournament.

“It probably is best not to extrapolate these past two months of solid spending activity, because as was the case south of the border, a post-World Cup vacuum awaits us,” he added.

The decline in retail sales at gas stations and fuel vendors was due to lower gas prices in June, said Andrew Grantham, senior economist at CIBC Capital Markets.

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Monthly retail sales data are volatile, he said, but the underlying trend remains positive even though nominal sales may have declined in July.

“Looking ahead to 2027, there are reasons to be cautiously optimistic regarding the consumer spending outlook, including the recent improvement seen in the labour market, expanded benefits for lower income households and a reduced drag on disposable incomes from mortgage refinances,” Grantham wrote in a note Friday.

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