July retail sales rise 3.5% year over year
July retail sales rose 0.6% from the previous month on a seasonally adjusted basis, triple the revised 0.2% growth in June, according to research from the National Retail Federation. Sales rose by 3.5% year-over-year, a continuation of June’s growth and consistent with long-term trends, the NRF said. (The numbers exclude automobiles, gasoline stations and restaurants.)
Online and other non-store sales rose 1.3% seasonally adjusted over June and 11.4% unadjusted year-over-year, the NRF found. Various categories, however, had different results. Clothing and accessories sales fell 0.2% seasonally adjusted from June but rose 0.1% unadjusted year-over-year. General merchandise sales increased 0.1% seasonally adjusted over June and 1.4% unadjusted year-over-year. Electronics and appliances sales fell 0.5% seasonally adjusted from June and 1.4% unadjusted year-over-year. Finally, furniture and home furnishings sales rose 0.4% seasonally adjusted over June and 4.3% unadjusted year-over-year.
In-store analytics firm RetailNext also found positive signs in July's store traffic number, which fell 5.5% but was the lowest decline in a year and a half. Sales saw a relatively low year-over-year decline of 5.3%, according to a company blog post. Conversion increased 0.5% for the second consecutive month, sales per shopper (sales divided by traffic) fell 1.1% and average transaction value fell 2.4%, RetailNext found. First Data, meanwhile, found that overall consumer spending growth declined for the fifth straight month in July to 3.2%, according to the firm's July 2017 SpendTrend report that was emailed to Retail Dive.
Back-to-school shopping in July marks just the start of that season, so the month doesn’t register a lot of those sales. That makes the monthly numbers all the more encouraging, according to NRF Chief Economist Jack Kleinhenz.
"Consumer spending remains solid as retail sales saw healthy improvements in July and revised June numbers were also positive," he said in a statement. "We have yet to see the full effect of back-to-school spending, but pickup in spending was evident both online and in general merchandise, which includes bricks-and-mortar department stores."
Rising home values helped home-improvement spending and home-related retail purchases, but price pressures are tamping down dollar amounts even as unit volume has risen, he noted.
That’s not likely to improve much, as many U.S. households face rising costs, including increasing fuel prices. In fact, U.S. consumers, especially at lower income levels, are beginning to struggle more with expenses and that will likely hurt consumer sentiment, according to a note from GlobalData Retail Managing Director Neil Saunders that was emailed to Retail Dive.
"Gas prices are not the only culprit," he contends. "An elevated level of spending over the early part of summer and into the back-to-school season has caught up with some households. With wage growth running at a sluggish 2.5%, some are now feeling the pinch and are starting to trim back where they can."
Consumer reaction to the financial challenge is muted so far, and back-to-school spending will help for a while. "However, as the summer season comes to an end, spending could wane further and faster," Saunders warned.
- National Retail Federation July Retail Sales Rebound, Up 3.5 Percent Over 2016
- RetailNext Retail Performance Pulse: Stores Post Relatively Strong July Results
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