Back-to-school purchases drove retail sales to grow again in August despite continued economic headwinds.
According to National Retail Federation (NRF) President/CEO Matthew Shay, “August retail sales show that consumers remain steadfast in the face of continued inflation and higher interest rates.” NRF’s analysis of August sales shows that consumers were focused on household priorities, such as purchasing supplies as students headed back to school for the semester. Looking forward, Shay says, “Entering the fall, we expect moderate growth to continue despite uncertainties like the direction of inflation and interest rates as well as a potential government shutdown.”
“The pace of retail growth cooled from July,” NRF Chief Economist Jack Kleinhenz added, but “consumers are still active even as they continue to be selective and price sensitive… Consumer spending growth has slowed but there is little hint of any sudden collapse.”
The U.S. Census Bureau said overall retail sales in August were up 0.6% from July and up 2.5% year over year. The NRF says that compares with increases of 0.5% month over month and 2.6% year over year in July.
NRF’s calculation of retail sales – which excludes automobile dealers, gas stations, and restaurants to focus on core retail – showed August was up 0.1% seasonally adjusted from July and up 3.3% unadjusted year over year. In July, sales were up 0.7% month over month and also up 3.3% year over year.
NRF’s numbers were up 3.2% unadjusted year over year on a three-month moving average as of August and up 3.8% for the first eight months of the year.
August sales were up in five out of nine retail categories on a yearly basis, led by health and personal care stores, online sales, and clothing and accessory stores, and up in all but two categories on a monthly basis.
Online sales and other non-store sales are up 7.6% unadjusted year over year. These non-store retailers are an increasing force when it comes to advertising. While traditional retailers typically spend 1.4% of total receipts on advertising, media analyst Brian Wieser says “non-store retailers – now 16% of total retail – spend 4.3% of their receipts on advertising.”
Additionally, food services, which are excluded from NRF’s definition of core retail, account for 13% of the broader definition of retail, Wieser notes, and “over-indexes as an advertising category at 1.8% of receipts going into advertising.”
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