Canadian retail sales increased 1.2% in August 2026 to C$74.6 billion, recovering from a decline in July, according to figures released Friday by Statistics Canada. Preliminary estimates suggest sales rose a further 0.7% in September, pointing to continued growth in consumer spending.
The August increase was slightly below the initial estimate of 1.3% and followed a 0.7% decline in July. Sales advanced across all nine retail subsectors, with motor vehicle and parts dealers contributing to the recovery.
In volume terms, total retail sales also increased 1.2%, indicating that the monthly improvement was not solely attributable to higher prices.
Vehicle Sales Lead Retail Recovery
Sales at motor vehicle and parts dealers increased 1.2% in August, led by a 1.5% rise at new car dealerships. The improvement followed a 1.4% decline in new vehicle sales during July.
Automotive parts, accessories and tire retailers recorded a 1.4% increase. However, sales at other motor vehicle dealers declined 1.4%, while used car dealers reported a 0.5% decrease.
The figures indicate that the recovery in automotive retail activity was concentrated primarily in new vehicle sales and related products.
Gasoline Sales Increase Despite Lower Volumes
Gasoline stations and fuel vendors reported a 1.7% increase in sales, marking their first monthly gain in three months.
However, sales volumes declined 0.5%, suggesting that higher prices contributed to the increase in nominal revenue rather than greater quantities of fuel purchased.
The distinction is important because retail sales measured in current dollars can increase even when consumers purchase fewer goods.
Core Retail Sales Show Broader Growth
Core retail sales, which exclude motor vehicle and parts dealers as well as gasoline stations and fuel vendors, rose 1.1% in August after declining 0.7% in July.
Food and beverage retailers recorded a 1.1% increase, their first monthly gain in three months.
General merchandise retailers reported a 1% rise following a 1.7% decline in July, while health and personal care retailers posted a 1.6% increase, extending their growth to a tenth consecutive month.
The improvement across these categories suggests that the August recovery extended beyond vehicle purchases and fuel spending.
September Estimates Point to Continued Growth
Statistics Canada’s advance estimate indicates that retail sales increased approximately 0.7% in September.
The preliminary figure was calculated using responses from 58.5% of surveyed companies and remains subject to revision as additional information becomes available.
The August results provide evidence of a recovery in retail activity following July’s decline, while the September estimate suggests that spending may have continued to expand into the following month.
Retail sales are closely monitored as an indicator of household demand and economic activity. However, the sector’s performance does not capture all consumer spending, particularly expenditures on services.
The upcoming final September figures will provide a clearer picture of whether the recovery in Canadian retail activity continued through the end of the third quarter.
