Statistics Canada says retail sales rose 0.7 per cent to $39-billion in July, more than offsetting a decline in June.
The results came in ahead of the 0.2 per cent that economists had been expecting.
The agency says eight of 11 subsectors accounting for 72 per cent of retail trade reported increases.
The increase was largely due to higher sales of cars, trucks and auto parts, as well as general merchandise. Automotive sales were up 1.7 per cent in July, mainly because of robust sales of new cars and high sales of recreational vehicles, motorcycles and boats.
General merchandise stores registered a 1.5-per-cent increase with department store sales up 2.9 per cent.
Retail sales increased in all provinces in July.