Photo: iStock | kupicoo
It could be that American consumers are not into retailers that much right now. It’s not that they are ready to ghost merchants, but they don’t feel the need to respond to every text or email offering deals on a wide range of merchandise.
Retail sales in March were one percent lower than in February but still 2.9 percent higher than at the same time in 2022, according to U.S. Census Bureau statistics. February’s sales were down 0.2 percent compared to January, but were up 5.9 percent from last year.
The National Retail Federation (NRF), which does not include auto dealers, gas stations and restaurants in its calculations, had March down half a point from February with a year-over-year gain of 4.6 percent. February was up 0.5 percent compared to January with a 6.7 percent improvement compared to last year. NRF has retail sales up six percent year-over-year for the first three months of 2023.
“March spending reversed the strong pace of core retail sales we saw earlier this year,” Jack Kleinhenz, NRF’s chief economist, said in a statement. “These results reflect both slower economic activity and lower prices because of easing inflation – which means fewer dollars spent even if consumers buy the same number of goods – but there is still a lot of spending in the economy. Keep in mind that households tend to shop less during the post-holiday season. In addition, tax refunds typically contribute to spending at this time of year but are smaller this year than last.”
NRF has maintained its forecast for retail spending to grow between four and six percent in 2023.
The trade group points to growth in five of the nine retail verticals it tracks in March including online/non-store, health and personal care, grocery, sporting goods and general merchandise.
Discretionary purchase categories did not fare as well with furniture/home furnishings, building materials/gardening supplies, electronics/appliances and clothing/accessories reporting year-over-year declines in March.
Positive signs in the market include continuing high employment rates even with recent high-profile layoff announcements in retail (David’s Bridal, Best Buy, Walmart, et al.) joining those in the financial services and technology sectors.
Inflation continues to soften with the most recent Consumer Price Index and Producer Price Index reports supporting that trend.
Travel continues to be a bright spot in the economy, up nine percent over 2022, according to the U.S. Travel Association.