Retail sales for the month of August saw gains despite the spike in COVID cases from the delta variant and supply chain problems that made some products unavailable or delayed them, the Commerce Department reported.
Food services and retail sales totaled $618.7 billion last month, an increase of .7% that followed a $1.8% decline last month.
Expectations for retail sales were forecast to decline .8% for the month due to consumer confidence surveys that showed big drop-offs, but instead online shopping surged and there were significant increases in sales at large retailers and furniture stores.
“Retail sales in August overcame unusual twists and turns that have affected shopping behavior both in terms of the timing and composition of sales,” chief economist for the National Retail Federation, a trade group for retailers Jack Kleinhenz said.
“The consumer remains rock solid”
“The consumer remains rock solid despite the trifecta of macroeconomic headwinds we’ve seen this year, including tapering off of government stimulus, elevated COVID-19 infections and ongoing supply chain challenges in the form of shortages of labor and goods,” he continued.
Non-store retailers gained 5.3% in August after falling 4.6% in July, while furniture stores jumped 3.4% after falling .1% in July. Food and beverage stores had a smaller gain of 1.8%.
Some sectors did see declines, however. Restaurants and bars flatlined and cut 42,000 jobs as some shied away from in-person dining again, and electronics and appliance store sales dropped 3.1% due to microchip shortages and shipping delays.
Car sales also dropped 3.6% as price surges in existing vehicles have started to abate.
“Inventories are so tight that some smaller dealers are unsure they will be able to cover overhead costs and could go under if inventories can’t be replenished soon,” chief economist at Grant Thornton Diane Swonk said.
“Brace yourself for slim pickings”
Swonk said automakers were leaving out chips that impacted cars’ bells and whistles so that they could get more cars to market, and that conditions for retailers might get worse before they get better.
“Brace yourselves for slim pickings on store shelves this holiday season,” she said.
Might be a good year to give theater tickets or some other kind of experience gift, rather than deal with backlogs that seem like they are going to be a lot worse than usual over the holiday season.