‘Impressive’ June Retail Sales Beat Forecasts, Show ‘Consumer Remains Engaged’

The national retail sector continues to exhibit resilience in the face of myriad challenges. The National Retail Federation (NRF) reports June retail sales were up 0.6% seasonally adjusted from May and up 2.3% unadjusted year-over-year.

NRF Chief Economic Jack Kleinhenz, says, “These are impressive results showing that the consumer remains engaged and that consumer spending gave a boost to the economy in the second quarter. The numbers are consistent with elevated consumer sentiment, healthy household balance sheets, low inflation and wage and job gains.”

A report by Marcus & Millichap showed retail spending picked up in June, climbing 3.8% on an annual basis for the third time in the past four months. The firm noted, stable consumption is supported by a strong economic foundation, highlighted by continued job creation and healthy inflation.

Spending was headlined by familiar faces over the past year, reports Marcus & Millichap, with single-tenant staples in restaurants and pharmacies each witnessing roughly 4% growth.

E-commerce again led all retail categories; however, Marcus & Millichap notes, growth in this segment has trended downward for the past year and a half. May marked the first month this cycle that e-commerce sales failed to reach double-digit growth. Though online shopping remains a key component of retail spending, its prominence has begun to moderate as experiential brick-and-mortar concepts gain more traction with consumers.

The industrial sector continues to benefit from both types of retail, driving demand for distribution centers and warehouses, points out Marcus & Millichap. In 2019, roughly 20% of the nation’s industrial leases will be taken by retailers as they look to strengthen last-mile delivery strategies in dense urban areas, as well as increase suburban footprints in response to demographic shifts.

As of June, the three-month moving average was up 3.7% over the same period a year ago, compared with 3.3% in May, reports NRF. June’s results build on gains of 0.4% month-over-month and 2.9% year-over-year seen in May.

“The year-over-year growth is particularly significant, given that it comes on top of strong gains at this time last year. While the prospect of tariff increases has subsided for the moment, trade uncertainties continue to weigh on the long-term outlook,” says Kleinhenz.

Specifics from key NRF retail sectors during June include:
– Online and other non-store sales were up 11.6% year-over-year, and up 1.7% month-over-month seasonally adjusted.
– Health and personal care stores were up 3.4% year-over-year, and up 0.5% month-over-month seasonally adjusted.
– General merchandise stores were up 2.3% year-over-year, and up 0.2% month-over-month seasonally adjusted.
– Grocery and beverage stores were up 2.1% year-over-year, and up 0.5% month-over-month seasonally adjusted.

Additionally, NRF reports:
– Electronics and appliance stores were down 5.8% year-over-year, and down 0.3% month-over-month seasonally adjusted.
– Sporting goods stores were down 5.3% year-over-year, and unchanged month-over-month seasonally adjusted.
– Building materials and garden supply stores were down 4.7% year-over-year, but up 0.5% month-over-month seasonally adjusted.
– Furniture and home furnishings stores were down 1.7% year-over-year, but up 0.5% month-over-month seasonally adjusted.
– Clothing and clothing accessory stores were down 1.6% year-over-year, but up 0.5% month-over-month seasonally adjusted.

The NRF numbers don’t include automobile dealers, gasoline stations and restaurants.

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