OTTAWA - Canadian retail sales rose more than expected in March, driven by increased purchases at new and used cars dealers, as well as electronics and appliance stores, data from Statistics Canada showed on Friday.

Sales were up 0.7 per cent, exceeding economists' forecasts for a gain of 0.4 per cent, while February's sales were revised to show a decline of 0.4 per cent, less than the initially reported 0.6 per cent decrease.

Sales rose in six out of 11 sectors in March, accounting for 53 percent of total retail trade. Stripping out the effect of price changes, volumes climbed 1.2 per cent.

The motor vehicle and parts sector led the way with a 3.2 per cent increase, driven by a 3.8 per cent gain in sales of new cars. Excluding autos, retail sales were down 0.2 per cent.

Sales at electronics and appliance stores jumped 3.1 per cent. Stores that are usually linked to home purchases and renovations also continued to see strength, with higher sales at building material and garden equipment stores, as well as furniture stores.