Canadian consumer spending solidified through the end of July.
Canadians spent 3% more this July as more sectors of the economy reopened and government benefits continued to support consumer spending, marking the first monthly year-over-year gain since the pandemic began.
According to RBC Economics, while spending in many categories was flat in July, spending on self-care and dining improved. Sales at restaurants, bars and other foodservices providers were just 9% below year ago levels at the end of July, as compared to -17% a month earlier. Canadians still opted to have the dining experience come to them: delivery and quick service restaurants have dominated recovery. Spending on haircuts and massages wasn’t far from last year’s level, reflecting increased availability of personal services.
After several weeks of rapid gains, spending on clothing was just below year-ago levels at the end of July. Spending at department stores and household goods retailers was flat, as high home improvement spending started to cool. With outdoor concerts, festivals and the like off limits, in-person entertainment spending was very low. But other categories held up.
Overall travel spending remained down 64% from a year earlier—still better than late March when it was 90% lower than a year prior. Consumers continued to spend more on accommodations and car rentals as well as gas and parking for their own vehicles. It isn’t yet clear whether the partial recovery in travel came mostly from local, mid-summer getaways.
