Canadian retail sales rose more than expected in July as consumers spent more on new cars, as well as food and alcohol, data from Statistics Canada showed on Friday.

The 0.4 per cent increase topped economists' expectations for a gain of 0.1 per cent, although volumes declined by 0.2 per cent.

Sales at motor vehicle and parts dealers led the way up with a 0.8 per cent rise. Purchases of new cars increased 1.4 per cent on both higher prices and volumes, offsetting declines at used auto dealers.

Canadian auto sales have been solid so far this year, potentially putting 2017 on track for a record.

Sales at food and beverage stores rose 0.9 per cent, the fourth monthly increase in a row. All types of retailers in this group had higher sales, led by supermarkets and other grocery stores, and beer, wine and liquor stores.