Canadian retailers posted sales of $61.3 billion in July, Statistics Canada reported Friday. This was down 2.5 percent from the previous month’s level, as lower sales at gas stations and clothing stores led to the decline. Sales at gas stations fell by 14%. A big part of that was lower prices for the fuel itself, but even in volume terms sales were down 7 percent. Fewer people were filling up during the month, which was in line with the vehicle class overall, as car sales fell 0.5%. Both new and used car dealers reported declines. Consumables such as food and drink also didn’t fly off the shelves, as supermarkets and convenience stores saw sales fall 0.9%, while liquor stores fell 1.2%. “The trend is clear, consumers are pulling back on spending,” said economist Royce Mendes with Desjardins. “The slowdown in consumption is exactly in line with what the Bank of Canada is trying to create with its interest rate hikes.” CIBC economist Karyne Charbonneau also linked the slowdown in spending to the central bank’s recent moves, saying in a note to clients that “Canadians may have begun to react to higher interest rates.”
