After a hiatus that seemed to take forever to some, on November 25, the Census Bureau released long-awaited results for September retail sales. These numbers are often useful since they help tell the story about what items and categories consumers are spending on vs. where they are penny pinching. They also convey real-time monthly information related to what consumers prize on the budgetary front.
Delayed release aside, factors to bear in mind for September results included the continued potential for tariffs and uncertainty around inflation. Consumers also continue to pay off debts, and the nation’s back-to-school shopping was a major spend event that took up part of the month.
Let’s take a look.
After a summer that included plenty of splurging, consumers took a more sober approach in September. Total sales rose to $733.3 billion from $732.1 billion in August, representing a rise by 0.2%.
When the August numbers were released, Neil Saunders, managing director of GlobalData remarked, “consumers continued to spend and produced a 3.5% lift in overall sales. This is a solid enough result, although a lot of it was driven by inflation – especially as discounting was neither as wide nor deep as it was in July. Underlying volumes rose by a relatively shallow 0.4%, which is a marked deterioration from the 1.4% volume increase produced last month.”
These slightly more muted results, according to Chip West, a consumer expert and commentator with RRD, “signals that shoppers across demographics are becoming more cautious, prioritizing value, and are more selective about purchases due to concerns about affordability and inflation.”
Several categories saw slight upticks in the month. Furniture and home furnishings rose to $11.418 billion from $11.354 billion while building material and garden supply stores came in at $40.153 billion compared to $40.090 a month prior. Food and beverage stores eked upward to $85.516 billion from $85.341 billion, while miscellaneous retailers rose to $15.083 billion from $14.655 billion.
Regarding groceries, West wrote, “September grocery store sales were up 3.1% year-over-year and 0.3% from August. In a time of higher prices and uncertainty where shoppers are relying on promotions to lower their grocery bills, the importance of paper coupons and offers are resonating with both consumers and grocers.”
Meanwhile, consumers splurged at gasoline stations to the tune of $52.853 billion compared to $51.811 billion the month prior. Food service and drinking establishments rose to $100.717 billion from $99.977 billion, and health and personal care rose to $40.584 billion from $40.150 billion.
Consumers spent less in September on electronics and appliances; ($7.689 billion, down from $7.728 billion) clothing and accessories; ($27.043 billion from $27.240 billion) and nonstore retailers ($127.801 billion from $128.785 billion.)
West continued, “After months of anticipating inevitable price increases, shoppers are exhibiting greater resiliency by prioritizing purchases, honing value-seeking behaviors, and forging ahead with their planned spending despite concerns. While consumer sentiment has regressed, it has not deterred retail spending, largely supported by sound economic underpinnings like wage growth helping to offset inflationary pressures.”
Although October results are not yet scheduled, it is a safe bet that with things up and running again, they will appear on a more typical schedule. In the interim, there are plenty of quarterly reports and holiday shopping updates to look to for clues about where consumers are spending and splurging.