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U.S. Retail Sales Gains Muted in June on Consumer Worries

Thu, Jul 14, 2:52 PM ET, by RetailSails.com


Retail sales in the U.S. rose slightly in June after declining for the first time in 11 months in May, driven by a rebound in auto sales that offset the biggest drop in gasoline sales in a year. However, excluding autos month-over-month sales were flat which represented the poorest performance since last July.

The U.S. Department of Commerce reported that Advance Estimates of U.S. Retail and Food Services sales for June rose an adjusted 0.1% from the prior month to $387.8 Billion, while sales increased 8.4% (unadjusted) compared to the year-ago period. Year-over-year, this was the 20th straight gain after 15 consecutive months of declines, which was the longest such streak on record.

Total US Monthly Retail & Food Services Sales

Total sales excluding Autos were up 8.3% in June from the year-ago period and little changed from May, while total sales less Autos and Gas Stations showed a 6.0% year-on-year increase and 0.2% month-on-month gain. While the overall increases compared to last year look impressive at first glance, total nominal sales in June still haven't registered much growth from June 2007 (+4.7% unadjusted, 5.2% adjusted).

Total US Monthly Retail & Food Services Sales - Long Term

Click here for more detailed results of June retail sales by line of business.

For the month, the strongest gainers included Building Materials & Garden Equipment and Supplies Dealers (+8.5% YoY / +1.3% MoM), Auto Dealers (+9.1% YoY / +0.8% MoM), Department Stores (+3.3% YoY / +1.4% MoM) and Clothing and Accessories Stores (+7.6% YoY / +0.7% MoM).

Online retailers enjoyed another month of strong growth as sales rose 11.2% from last June and 0.3% over May, and have been one of the major beneficiaries of rising gas prices as consumers look for convenience.

Most other segments were not as robust in June, and discretionary categories such as Furniture & Home Furnishing Stores (+0.2% YoY / -0.8% MoM) and Electronics & Appliance Stores (-2.3% YoY / -0.2% MoM) continue to struggle and have barely seen any growth over 2010.

As we have seen with other economic indicators, consumer spending has softened following a strong Spring Break season as household budgets feel the strain of higher food and fuel costs, worries about the economy and a still disappointing job market. While recent declines in gas prices are a welcome development, shoppers are still paying 34% more at the pump than a year ago and discretionary purchasing power continues to erode, especially for low and middle-income consumers.

Retailers will focus on summer clearance sales for the rest of July, as they prepare for the all important back-to-school and fall seasons. After heavy promotional activity in June, companies hope to push more full-price selling and there will be substantial price tag increases as they will pass on higher input costs onto consumers. It remains to be seen how value-hungry shoppers will respond to sticker price shock after getting used to large discounts, but most retailers will keep inventories lean to try and sustain margins.



SDI Glossary: "price" Definition
This Article's Word Cloud:   Autos   Dealers   Department   July   June   Retail   Stores   While   adjusted   after   compared   consumers   costs   declines   discretionary   excluding   first   from   gain   growth   have   higher   increases   last   look   month   months   more   other   over   period   price   prices   retailers   rose   sales   seen   shoppers   still   strong   such   that   they   total   unadjusted   were   which   while   will   year

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