Retail sales across Canada were flat and unchanged at $51.3 billion in June from May but were up 1.1 per cent year over year, according to Statistics Canada.

But the Toronto Raptors’ presence in the National Basketball Association finals increased sales at sports and sports clothing stores across the country.

Stronger sales across most subsectors were offset by lower sales at motor vehicle and parts dealers and gasoline stations. Excluding sales in these two subsectors, monthly retail sales advanced 1.7, per cent, it said.

Sales were down in four of 11 subsectors, representing 48 per cent of retail trade.

Retail sales for the second quarter increased 1.2 per cent, added StatsCan.

“June’s retail sales release was a positive surprise which adds some upside to our three per cent real GDP tracking for the second quarter and provides a bit of momentum heading into the third quarter. Of course, it is important to note that driving some of the gains were transitory factors – most notably the Toronto Raptors games in the NBA finals (per Statistics Canada) which supported increased sales at clothing and sporting stores,” said Omar Abdelrahman, an economist with TD in a commentary note.

“Looking ahead, we expect that household debt levels will continue to put a damper on retail sales and consumer spending growth. That said, the recent surges in wage growth, stabilizing housing markets, and declining borrowing rates will serve to ease some of the existing headwinds to the sector. Against this backdrop, the Bank of Canada still faces a tough road ahead, balancing otherwise healthy domestic indicators against elevated external risks.”

Benjamin Reitzes
BMO economist

Benjamin Reitzes, an economist with BMO, said June’s strong details were largely a reversal of May’s sharp declines as better weather and seasonal adjustment quirks provided a lift for the retail sector.

“Despite the good gain in underlying sales, the real story is that volumes are unchanged over the past year as debt burdens restrain spending growth. That’s likely to be a theme for some time,” he wrote in a commentary note.

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