Retail sales spike 1.6% in September
- Total retail and foodservice sales in September jumped 1.6% from the previous month, to $483.9 billion, 4.4% higher than September 2016’s sales, according to Commerce Department data.
- That figure — buoyed by purchases of cars, gasoline and building materials in the wake of devastating hurricanes in September — represented the largest increase since March 2015, according to Bloomberg.
- The Commerce Department said that retail trade sales were up 4.7% over last year, gas station sales rose 11.4%, and building materials, garden equipment and supplies sales increased 10.7%.
Below the spikes from hurricane-related purchases is a strong underlying consumer economy.
Neil Saunders, managing director of GlobalData Retail, said in a Friday note emailed to Retail Dive that September’s retail numbers "demonstrate the robustness of the American consumer." He added: "Indeed, the fear for September was that as gas prices rose, spending on other things would fall back. In the end, this did not materialize, and consumers used modest gains in wages — supported by the robust labor market — to carry on buying even as they incurred additional expense."
GlobalData’s own weekly sentiment tracker found "a little more caution about future household finances creeping in during September but also revealed very few significant changes in purchasing habits across the month," Saunders said. With consumers more conservative with their spending, "retailers have to work hard to stimulate demand," Saunders added. "In our opinion, this means that while there are gains to be had over the holidays, those gains will be hard won and will be insufficient to benefit all retailers."
Analysts with Gordon Haskett pointed out in a Friday note emailed to Retail Dive that while the building and gardening material sectors saw strong gains, electronic and appliance store sales fell 5.3% (below the 12-months trend of 3% declines). Saunders said that some of the decline in electronics sales stems from "the shift to sales via other channels and retailers, but some is also due to a relative lack of interest in products."
"It remains to be seen whether the release of new devices, like Apple's iPhones, will help lift this sector as we move into the holiday season," Saunders added. "We remain skeptical that it will do so to any significant degree."
September’s retail numbers stand in contrast to August, which saw the biggest one-month drop in six months. "Retail industry earnings and sales growth has been in the dumps for the better part of the last 10 quarters despite a continued modest economic expansion and improving personal income," Retail Metrics President Ken Perkins said in an email to Retail Dive in August. "Quarterly retail revenue growth has averaged just 3.2% over the past three years, down from 3.8% during the 2009 to 2013 period and off sharply from the robust 8.7% growth racked up from 2000 to 2008.
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