Retail sales see bounce back from August to September, says Commerce and NRF

Following a decline in August, retail sales rebounded in September, according to data issued today by the United States Department of Commerce and the National Retail Federation (NRF).

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Following a decline in August, retail sales rebounded in September, according to data issued today by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that September retail sales saw a 0.6 percent increase over August at $459.8 billion and were up 2.7 percent annually. Total sales for the July 2016 to August 2016 period were up 2.4 percent compared to the same period a year ago. Retail trade sales saw a 2.2 percent annual gain and were up 0.6 percent from August to September.
And nonstore retailers were up 10.6 percent compared to September and were up 6.1
percent annually.

The NRF reported that retail sales, excluding automobiles, gas stations, and restaurants, were up 0.2 percent from August to September, following a 0.3 percent dip from July to August, with September retail sales up 4.1 percent annually.

“This much-needed bounce in retail sales should allay some fears that the overall economy is losing its propulsion,” NRF Chief Economist Jack Kleinhenz wrote in a blog posting. “September’s uplift came from recent job and wage improvements and modest increase in credit use, punctuated by increased consumer optimism regarding current and future economic conditions. Consumers are spending, the picture is improving and shoppers should be in a position to spend more freely, especially as we move into the holiday season.”

Earlier this month, the NRF issued a positive forecast for Holiday Sales.

These sales, as defined by the NRF, are sales in the months of November and December and exclude autos, gas, and restaurant sales. And for 2016 the NRF is calling for holiday retail sales to head up 3.6 percent annually to $655.8 million, which marks a decent boost compared to the 10-year average of 2.5 percent and is also above the seven-year average of 3.4 percent, going back to the beginning of the economic recovery in 2009.

As expected, e-commerce is again expected to play a large role in holiday shopping, with the NRF saying it expects online sales to head up between 7 and 10 percent annually to as much as $117 billion, which is 10.3 percent higher than last year’s online holiday sales projection.

While the NRF’s holiday sales forecast is promising it is actually slightly off from 2015’s and 2014’s 3.7 percent and 4.1 percent forecasts, respectively.  The 2015 holiday shopping season ended up seeing a 3.0 percent annual increase.

The NRF’s holiday sales forecast, according to the organization, is based on an economic model that uses several different types of indicators, including consumer credit, disposable personal income, and previous monthly sales releases

“Retail sales ended the third quarter on a high note, but the first two months were not very good,” wrote IHS Global Insight US Economist Chris Christopher in a research note. “After a dismal showing in August, several retail sectors made a comeback in September, including autos, furniture, building materials, sporting goods, and online. Clothing stores and electronics had a good August, but a not-so-good September. The onliners are clearly taking share from the traditional department stores. Department stores and general merchandise have been under water for three months in a row.  Restaurants have been and will continue to outpace grocery stores sales.”

Christopher added that the back-to-school retail season was a downer for the most part this year. It is very clear that consumers are learning that they can wait for better, deeper, and stronger price discounting that start in early November – holiday shopping is cannibalizing the back-to-school retail sales.

About the Author

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. Contact Jeff Berman

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