Subscribe to our free, weekly email newsletter!


Commerce and NRF report flat retail sales numbers for July

By Jeff Berman, Group News Editor
August 13, 2014

Modest-to-flat gains in retail sales numbers are somewhat commonplace these days, and that was the case once again from June to July, based on data issued today by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that July retail sales at $439.8 billion were flat compared to June and up 3.7 percent compared to July 2013, and total retail sales from May through July are up 4.2 percent annually. And excluding automobiles, Commerce said total retail and food services in July were up 0.1 percent over June at $352.2 billion and up 3.1 percent compared to July 2013.

The NRF said that July retail sales, which exclude automobiles, gas stations, and restaurants, were up 0.1 percent annually and up 4 percent on an annual unadjusted basis.

“Overall, I still believe the economy and the consumer are headed in the right direction as consumer fundamentals such as positive income, employment and confidence remain relatively sturdy,” said NRF Chief Economist Jack Kleinhenz in a blog posting. “Retailers right now are witnessing a choppy pattern of spending, choosing between large ticket items and other discretionary purchases, with services they may need. Families today are still displaying behavior that shows they continue to struggle with purchase decisions, based on needs versus wants. It is also evident some consumers are cautious about leveraging up credit to support purchases.”

Kleinhenz also pointed out that the cumulative annual growth averages for June and July comes in at about 4 percent and is presently on track for the NRF’s recently revised estimate of annual retail sales growth of 3.9 percent for the rest of 2014.

As previously reported, with retail sales growth still relatively modest, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data.

And these things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.

Supply chain stakeholders describe the current market environment as it relates to retail supply chains as steady for the most part. With the impact of the harsh winter weather in the background, shippers are rebuilding inventories in advance of Peak Season.

As previously reported, Stifel Nicolaus analyst John Larkin said at last April’s NASSTRAC conference that it is reasonable to expect retail sales to be somewhat tempered as a large amount of U.S. consumers are still recovering from the Great Recession. He supported that thesis by explaining that housing is at about 40-to-45 percent of the peak levels from January 2006.

Sterne Agee Chief Economist Lindsey Piegza wrote in a research note that with retail sales flat, it calls into question what she described as optimistic expectations of 3-to-4 percent GDP growth in the second half of this year.

“Since a short-lived rebound in sales in February and March, the consumer has continuously slowed consumption,” Piegza noted. “Sales dropped throughout the second quarter to a 0.2 percent pace in June and have now fallen flat at the start of Q3. If the consumer is not out spending, the economy will struggle to maintain the average 2 percent pace of the recovery, let alone an elevated +3 percent pace.”

Tom Nightingale, president, transportation logistics, for Genco, a Pittsburgh-based 3PL, told LM that even with relatively modest retail sales growth, the underlying trends, as they relate to the retail supply chain, are still strong.

“One of the biggest trends or changes in the retail supply chain space is adapting to a changing set of buying behaviors,” he explained. “It is a shift that is going on in the marketplace between bricks and mortar and e-commerce and trying to effectively handle last-mile delivery in a market that is changing as fast as retail is. It is probably going through the most cathartic change we have seen in its history from a supply chain standpoint in the past few years. So, while the overall numbers may not be earth-shattering, what is going on below the waterline is definitely nothing short of phenomenal. Retail supply chain professionals are working hard to solve a puzzle that is changing daily.” 

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Information abounds about the growing trend of electric lift trucks and the advantages and disadvantages of the electric solution. Amid all of the information from so many sources, what's the truth about electric lift trucks? This complimentary white paper breaks through the clutter to review why electric lift trucks are gaining in popularity and also to review their challenges, as well as their economic and environmental benefits.

Three weeks after initiating a coordinated series of slowdowns that have mired the major West Coast ports of Tacoma, Seattle, Oakland, Los Angeles and Long Beach, the ILWU has pushed away from the bargaining table.

DHL has released the third edition of its Global Connectedness Index (GCI), a detailed analysis of the state of globalization around the world.

The truck driver shortage is worsening, threatening the trucking industry’s ability to serve the nation’s supply chains. The shortage will almost certainly cause fleets’ costs to increase and shippers’ rate to continue to rise.

The Agriculture Transportation Coalition has asked the Administration to bring in a federal mediator to help resolve the negotiations, and if a strike or lockout occurs, the AgTC advocates the rarely-invoked Taft-Hartley Act.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA