July Retail Sales Slip 1.1% After Slight Gain in June; NRF Maintains '21 Forecast
Supply chain disruptions, delta variant impacts and increased consumer spending for dining, services and travel led to a drop in retail spending in July, reported the National Retail Federation Tuesday. NRF’s sales tally of core retail -- excluding car dealers,…
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gas stations and restaurants -- showed a 1.1% decline from June after a 1.1% increase from May. Year-over-year sales grew 9.5% vs. July 2020, when store sales were affected by COVID-19 closures. Electronics and appliance store sales were up 0.3% month-over-month and 23.4% year on year, it said. NRF Chief Economist Jack Kleinhenz said the American consumer continues to be “resilient” despite recent price increases. “If retailers could find more inventory, they could sell it,” he said. Though consumers are “a bit fearful" about increases in COVID-19 cases due to the delta variant, “they’ve learned to live with the virus and shopping continues.” The variant could have an impact on local markets, “especially where vaccination rates are low, but doesn’t appear likely to show up in the national data,” Kleinhenz said. NRF encouraged vaccination. The shift to spending on services was expected as more of the economy reopened, he said, and Amazon’s move of Prime Day to June may have “siphoned off some sales that normally come in July.” But consumer finances are “in good shape with a cushion from paying off debt and building up savings,” and employment and wages have seen recent increases, he noted. Back-to-school spending has been “solid,” and is expected to spill over into August, he said. The trade group maintained its outlook for the year of 10.5%-13.5% growth over 2020 to $4.44 trillion-$4.56 trillion.