U.S. retail sales in August rose slightly from the previous month and, amid continued high inflation, remained well above year-ago levels, including for groceries.
Retail and restaurant sales in August totaled $683.29 billion (seasonally adjusted), up 0.3% from July but up 9.1% from August 2021, a reported Thursday the US Census Bureau in advance estimates. Retail sales in August – excluding motor vehicles and parts stores, gas stations and repair stations – rose 0.2% to $611.19 billion, and increased 8.9% year over year.
In July, total retail sales were flat month over month, but rose 10.3% from a year earlier. Retail sales for the month followed the same trend, with no sequential gain but 10.1% compared to July 2021.
Retail grocery sales in August were $71.13 billion (seasonally adjusted), matching July’s 0.2% month-over-month growth and up 7.7% compared to August 2021, compared to a 9.2% year-over-year gain in July. The Census Bureau said sales at all food and beverage stores in August rose 0.5% sequentially and 7.2% year-over-year to $79.47 billion, versus increases 0.2% month-over-month and 8.4% year-over-year in July.
Year-to-date through August, food and beverage store sales rose 7.9% year-over-year to $618.15 billion (unadjusted data) . This included an 8.7% growth to $555.34 billion in grocery stores over the eight-month period.
“Retail performance remains strong as, despite inflation, consumers continue to spend and be resilient,” said Naveen Jaggi, president of retail advisory services at commercial real estate firm Jones Lang LaSalle (JLL). .
“However, retail foot traffic fell month-over-month in many categories, but with the notable exception of categories where back-to-school shopping is likely to occur, such as electronics stores, office supplies, discount and dollar stores and department stores, according to Placer.ai“, he explained. “It is clear that, more than ever, consumers were paying more attention to discounts than they usually would over the summer.”
The recent easing in fuel prices has also given buyers a boost in the arm. “Consumers are beginning to breathe a sigh of relief as gasoline prices drop, giving shoppers the option to spend on personal care and back-to-school items, and continue to revert to pre-existing spending habits. the pandemic,” Jaggi noted. “One category to watch in the coming month is food services and drinking places, as consumers are increasingly cautious with spending at grocery stores due to rising food prices.”
Katie Thomas, head of the Kearney Consumer Institute (KCI), the retail think tank of global strategy and management consultancy Kearney, had predicted a “flat to slightly easing” for August retail sales , consumers keeping the purse strings tight at the grocery store, even amid falling gas prices.
“Some categories may be slightly supported going into the back-to-school, including the apparel and general merchandise segments,” Thomas said in an email. “Otherwise, we expect discretionary categories, from restaurants to electronics, to continue to bear the brunt of reduced consumer spending. We expect even home improvement to soften compared to last month.
As in recent months, the effect of inflation on retail spending in August was evident, according to Claire Tassin, retail and e-commerce analyst at data intelligence firm Morning Consult. In a report earlier this monthTassin had cited figures from a Morning Consult survey showing that, through July, more than half of consumers said they had spent more than last year on groceries.
“August retail sales numbers beat expectations, but given the latest CPI numbers, we know inflation is still having a major impact on spending. While gasoline prices are down from last month, prices are still up from last year, and high grocery prices are reflected here as well,” Tassin observed.
Analyst Scott Brave, chief consumer spending economist at Morning Consult, added: “The higher-than-expected CPI print earlier this week was evident in today’s retail sales numbers. . While retail and food service sales rose 0.3%, much of it came from auto spending, with sales excluding autos down by the same amount. When this data is incorporated into personal consumption expenditure later this month by the Bureau of Economic Analysis, it will confirm what we are already seeing in Morning Consult’s consumer expenditure data for August – very weak growth in actual expenses.
The National Retail Federation estimated August retail sales (unadjusted) rose 0.1% month-over-month and 8% year-over-year, down from gains of 0 .5% sequentially and 7.2% year-on-year for July. Washington-based NRF’s estimate focuses on basic retail, excluding car dealerships, gas stations and restaurants.
“Household spending remains stable, even as costs continue to rise,” said NRF chief economist Jack Kleinhenz. “Consumers who continue to spend more each month point to the benefits of strong job and wage growth and their use of pandemic savings to help manage persistently high prices. Consumers are showing their tenacity, but they have limited options and cannot continue unless prices start to drop. This retail sales report comes amid mixed signals from the broader economy that show the headwinds against the consumer are strengthening.
August sales increased in five of nine retail categories on a monthly basis (led by building supply/garden supply stores, grocery/beverage stores, general merchandise stores, sporting goods and clothing/accessory stores) and in eight of the nine categories on a monthly basis. base (led by building supply/garden supply stores, online retailers, grocery/beverage stores, and sporting goods stores), NRF reported.
Grocery and beverage stores posted seasonally adjusted month-over-month sales increases of 0.5% in August and 8% unadjusted year-over-year. Among other retail categories in the food, drug and mass retail channel, sales rose 0.5% month-over-month seasonally adjusted and 3.2% unadjusted year-over-year for general merchandise stores in August, while health and personal care stores (including drugstores) reported sales down 0.6% month-on-month the other, seasonally adjusted, but edged up an unadjusted 3.7% year-over-year, the NRF said.
“August retail sales show consumer resilience to spend on household priorities despite persistent inflation and rising interest rates,” commented NRF President and CEO Matthew Shay. “As we prepare for the holiday season, consumers are looking for value to make their money work. Retailers have worked hard to manage their supply chains and holiday inventory to provide consumers with great products, competitive prices and convenience at every opportunity.