Retail sales show modest gains for second month in a row
By Jay Keller
The Census Bureau on Monday reported that retail sales were flat across major retail sectors except for the sale of autos and parts which accounted for most of June’s increase.
Customers also bought more furniture and shopped at “nonstore” retailers as spending in these areas outpaced others to help boost June sales.
Nonstore retailers, often considered to represent online sales, showed a gain of 13.8 percent from 2012 while auto dealers were up 12.9 percent from the previous year.
Also, as expected, sales of summer clothing and gasoline also increased in June.
Consumer spending declined at department stores and electronics/appliance stores while underperformance hounded other retailers like grocery stores and restaurants, suggesting that many customers remain quite retrained in buying habits.
Monday’s report surprised again for the second month industry forecasts predicting a better month based on the increased demand for building supplies and garden equipment.
According to the median forecast of economists surveyed by Bloomberg on Sunday, purchases at retailers were expected to be the highest in four months at 0.8 percent.
Just like in May, removing auto dealers from the equation shows a margin below industry forecasts that has re-ignited a discussion about how consumer spending is slowing due to the impact of January’s tax increases.
Other news outlets and industry insiders believed June would post higher sales based on the hot housing market, record-high stock prices, home starts and a positive jobs report where the retail sector added 37,000 jobs.
Regardless, economists still recognize that June spending did post a gain despite the fact that the gain was weaker than predicted.
Many still believe that the overall picture is encouraging even though the numbers show a less-than-engaged consumer in June.
In fact, many retailers proactively made recent strategic moves to counter flat sales by kicking off early holiday sales with earlier back-to-school sales campaigns where planning began in early June and kicked off shortly after the July 4th holiday.
Through these efforts, retailers are hoping to boost seasonal clearance events by adding additional cross-promotional campaigns.
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