(Bloomberg) -- Retail sales in Canada rebounded as brick-and-mortar shops were allowed to reopen after months of Covid-19 shutdowns, though early data shows that momentum was short-lived.
The value of receipts rose 4.2% in June, Statistics Canada reported Friday in Ottawa. However, that bounce-back was quickly reversed in July with a preliminary estimate showing a 1.7% decline on the month. That brings total sales down about 5% from their post-pandemic peak in March.
The report suggests consumers were initially eager to buy goods when businesses reopened, though the weakness in July could reflect a shift in consumption to services. That kind of change has been expected by economists, who anticipate more spending on things like restaurant meals and haircuts now that they’re allowed.
“Canadians probably started replacing goods purchases with services. And even with the retreat in July, retail sales are still well above pre-Covid levels,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce, said by email.
June’s retail gains were broad-based with 8 of the 11 categories posting increases. Clothing and accessories stores led, rising 49.1% as they reopened after months long lockdowns.
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