Retail sales rise 2.2 per cent in May, topping Statcan estimates

• Higher gas prices and sales at new car dealers helped lift Canadian retail sales 2.2 per cent in May to $62.2 billion, but an early estimate by Statistics Canada pointed to a slowdown in the pace of sales gains for June.

The reading for May topped the agency’s preliminary estimate for the month that had suggested a gain of 1.6 per cent, however Statistics Canada said Friday its early estimate for June pointed to growth of just 0.3 per cent.

TD Bank economist Ksenia Bushmeneva said retail sales advanced at a strong pace in May, but the details of the report were not as positive.

“Much of the gain in May is due to higher prices, particularly at the pump, and a recovery in auto sales following three months of decline,” Bushmeneva wrote in a report.

Digging deeper in the report, she said a number of categories, such as gasoline, clothing and sporting goods, actually saw sales fall in inflation-adjusted terms.

Statistics Canada said core retail sales — which exclude gasoline stations and motor vehicle and parts dealers — increased 0.6 per cent for May, while overall retail sales in volume terms rose 0.4 per cent in the month.

“With inflation running at a multi-decade high, higher prices have been giving a lift to nominal retail sales figures. As such, it’s becoming increasingly important to look at spending in real or inflation-adjusted terms,” Bushmeneva said.

Statistics Canada said the overall increase in retail sales for May came as sales rose in eight of the 11 subsectors it tracks.

The gain in core retail sales was led by a 1.9 per cent gain in sales at food and beverage stores, while sales at general merchandise stores gained 1.4 per cent.

Statistics Canada said the largest decline to core retail sales in May came from a 6.7 per cent drop in miscellaneous store retailers which includes pet stores, cannabis stores and office supplies and stationery stores.