Reflecting the latest Consumer Price Index, U.S. retail sales in July were flat versus the previous month and up significantly from a year ago, with grocery stores in line with that trend.
For July, U.S. retail and foodservice sales totaled $682.82 billion (seasonally adjusted), marking no gain from June but climbing 10.3% from July 2021, the U.S. Census Bureau reported in advance estimates this week. July retail trade sales — excluding motor vehicles and parts stores, gas and repair stations — also were flat sequentially, coming in at $596.77 billion, and rose 10.1% from a year earlier.
In June, overall retail sales had edged up 1% month to month and grown 8.4% year over year. June retail trade sales, similarly, increased 1% sequentially and 7.7% versus a year before.
At grocery stores, July retail sales totaled $70.81 billion (seasonally adjusted), inching up 0.2% month to month but surging 9.2% year over year, the Census Bureau said. Sales at all food and beverage stores rose 0.2% sequentially and 8.4% year over year to $78.96 billion (seasonally adjusted) for the month.
For June, grocery store sales advanced 0.6% from May and were up 8.3% from a year earlier, while food and beverage store sales gained 0.4% sequentially and 7.1% year over year.
Year-to-date through July 2022, food and beverage store sales were up 7.8% year over year to $537.26 billion (unadjusted), including an 8.7% uptick to $482.86 billion at grocery stores over the seven-month period.
“Today’s retail sales number is a direct reflection of inflation’s impact on consumer spending. Americans have had to trade down or delay purchases as inflation continues to squeeze household budgets, and that’s apparent in today’s 0.0% month-over-month change in retail sales,” Claire Tassin, retail and e-commerce analyst at data intelligence firm Morning Consult, said in a statement when the Census Bureau released July sales data on Wednesday. “There’s good news in these numbers though, as gasoline spending declined from June to July (but of course is still up significantly over last year). Online sales growth (up 2.7%) is noteworthy as well, as the share of consumers who shop online for the purpose of saving money has risen in recent months.”
Naveen Jaggi, president of retail advisory services at commercial real estate firm Jones Lang LaSalle (JLL), noted that the virtually flat retail sales numbers from June to July came even as the back-to-school selling season was in full swing.
“This is interesting considering, more parents planned to shop for back-to-school supplies in July, which would have bumped up sales for electronics, apparel, department stores and general merchandise,” Jaggi commented. “However, non-store retailers were up 2.7% from the previous month, which means parents were likely buying school supplies and clothes online. This is consistent with the share of parents who plan to have at least some of their back-to-school purchases shipped to their homes, surging 14% points to 61.7%, according to JLL’s Back-to-School survey.”
U.S. retail sales got a slight lift in July as the CPI eased from the previous month and fuel prices continued to decline, according to the National Retail Federation (NRF). Last week, the U.S. Bureau of Labor Statistics (BLS) reported that the July Consumer Price Index (CPI) was flat month to month (seasonally adjusted) but up 9.1% year over year. Inflation continued to rise in July for non-discretionary categories like grocery, however, as the food-at-home index edged up 1.1% month over month and 12.2% year over year, the largest gain since the 12 months through April 1979, according to BLS.
“Retail sales grew in July, supported by declines in prices at the gas pump and moderately lower inflation,” NRF President and CEO Matthew Shay stated. “Consumers are adapting to higher prices by prioritizing essentials like food and back-to-school items, and retailers are working hard to absorb the impact of higher costs and help customers stretch their hard-earned dollars.”
Washington-based NRF’s estimate — which excludes automobile dealers, gas stations and restaurants to focus on core retail — had July retail sales rising 0.8% on a seasonally adjusted basis from June and climbing 7.1% unadjusted year over year. In June, sales increased 0.6% month to month and 6% over 12 months, NRF said.
July sales gained in six of nine retail categories on a yearly basis (led by online retailers, grocery stores and building materials/garden supply stores) and seven of nine categories on a monthly basis (led by online retailers, building materials/garden supply stores and health/personal care stores), NRF reported.
Grocery and beverage stores saw sales grow 0.2% month over month seasonally adjusted in July and 7.7% unadjusted year over year. Among other retail categories in the food, drug and mass channel, sales declined by 0.7% month over month seasonally adjusted and by 0.1% unadjusted year over year for general merchandise stores, while health and personal care stores (including drugstores) saw sales increase 0.4% month over month seasonally adjusted and 1.5% unadjusted year over year, NRF said.
“Retail sales were up considerably compared with a year ago, even though consumers are more discerning in this economic environment,” NRF Chief Economist Jack Kleinhenz observed. “Consumer spending was an encouraging signal as the economy kicked off the third quarter. Nonetheless, inflation is still disturbingly high, even as it eases, and is the most important challenge for consumers and retailers. The future path of inflation remains a key factor for the economy and monetary policy as the Federal Reserve works to bring price increases under control.”