Canadian retail sales were up 1.5 per cent to $70.2 billion in June, led by increases at food and beverage retailers, according to Statistics Canada.

The agency on Friday said retail feedback for the month highlighted the effects of trade tensions between Canada and the United States, with 27 per cent of retail businesses indicating they were impacted, but that was down from 32 per cent in May.

The most common impacts in June were price increases, the change in demand for some products and supply chain delays, it said.

Core retail sales, which exclude gasoline stations, fuel vendors and motor vehicle and parts dealers, were up 1.9 per cent. Statistics Canada said the increase resulted from higher sales at

food and beverage retailers , which were up 2.3 per cent, with all store types posting gains.

The agency said the increases in all nine retail subsectors were led by higher sales at supermarkets and other grocery retailers, which were up 1.8 per cent in June following a decline of 0.6 per cent in May.

Also contributing to the increase was a 4.3 per cent rise in sales at beer, wine and liquor retailers and 5.3 per cent at convenience retailers and vending machine operators.

Statistics Canada also said retail sales during the second quarter were up 0.4 per cent and increased 0.7 per cent in volume terms.

But Desjardins economist Florence Jean-Jacobs said contrasting the first half of 2025 with the second half of 2024 certainly shows consumers are more hesitant these days.

“Uncertainty due to trade tensions, combined with very slow population growth, appears to have weighed on retail sales,” she said in a note.

While June’s widespread gains are encouraging, Jean-Jacobs said it seems like Canadians didn’t continue their shopping spree in July since Statistics Canada’s preliminary estimate for that month suggests a 0.8 per cent drop in sales.

Andrew Grantham, a senior economist at CIBC Capital Markets, said retail sales “have been on a rollercoaster ride” so far this year and that continued into early summer as the surge in sales during June appears to have been partly reversed in July.

“The rollercoaster continues,” he said in a note. He also said the small increase in sales volume in June from the final month of 2024 signals fairly cautious consumer spending in the face of all the tariff uncertainty.

This positive yet sluggish trend in demand suggests inflationary pressures should continue to gradually ease and allow the Bank of Canada to return to interest rate cuts later this year, he said.

Alexandra Brown, an economist at Capital Economics Ltd., said the strong rebound in June retail sales from May should reassure policymakers that consumer spending is holding up, although the expected drop in sales in July implies that growth remains muted.

She said this strengthens the case for the Bank of Canada to prioritize economic and labour market weakness and cut rates in September, although it will receive another consumer price index print and second-quarter gross domestic product data before it makes its decision.

Michael Davenport, senior Canada economist at Oxford Economics Ltd., said he believes the momentum in consumer spending will wane in the second half of the year as job losses and higher prices due to tariffs squeeze disposable income.

“It may be the case that Canada’s temporary counter-tariff remissions are limiting the passthrough of tariffs to consumer prices and cushioning the impact of the trade war on households so far,” he said in a note.