Strong retail sales in May followed by the effects of the Alberta floods and a labour strike in Quebec led to a drop in Canada's June retail sales of 0.6 per cent to $40.1 billion, according to Statistics Canada.
Food and beverage store sales took the biggest hit, declining 1.2 per cent in June. A month earlier these sales had climbed 1.1 per cent, owing in part to the resumption of the National Hockey League playoffs.
Supermarkets and other grocery stores (-0.9 per cent) and beer, wine and liquor stores (-2.1 per cent) were the hardest hit in the food and beverage subsector, Statistics Canada said, but "weaker sales were reported by all store types within this subsector."
June drop comes after exceptionally strong May
The June drop offset the strong gains seen in May, which had the fastest pace of growth since March 2010, with sales rising 1 .9 per cent to $40.4 billion, more than twice what economists were expecting.
"Canadian consumers fared a bit worse than expected," CIBC World Markets economist Emanuella Enenajor said in a research note, noting a 0.8 per cent decline when auto sales are excluded.
"Autos sales were roughly flat, but most other sectors posted acute weakness, including furniture, electronics, building materials, food and clothing," Enenajor wrote.
For the first six months of the year, sales were up 1.8 per cent over the same period in 2012.
The biggest drop in sales in June was in Ontario, whose retailers reported a 1.4 per cent decrease. It was one of four provinces that saw a drop that month.
Quebec and Alberta both had widespread losses, owing to a labour strike in the construction industry in Quebec and a series of devastating floods in Alberta, Statistics Canada said. Quebec sales were down 1.3 per cent while Alberta had a 0.6 per cent drop.
The June provincial numbers were a stark contrast to May, when all provinces registered gains, with Quebec showing the largest increase in dollar terms with sales increasing 3.1 per cent
Newfoundland and Labrador also saw its retails sales drop by 1.4 per cent in June — after four months of gains.
British Columbia, Manitoba and Saskatchewan all reported sales gains on the strength of new car sales, the agency said.