August Retail Sales Rise, Signaling Retail Resilience Entering Q4
Retail sales increased during August as consumer demand outweighed the pandemic, supply chain disruptions and other factors affecting spending, the National Retail Federation (NRF) said Thursday. The U.S. Census Bureau reported overall retail sales in August were up 0.7 percent seasonally adjusted from July and up 15.1 percent year-over-year. Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, according to Census data.
NRF’s calculation of retail sales — which excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed August was up 2.3 percent seasonally adjusted from July and up 12 percent unadjusted year-over-year. NRF’s numbers were up 11.4 percent unadjusted year-over-year on a three-month moving average. For the first eight months of the year, sales as calculated by NRF were up 15 percent over the same period in 2020. That's consistent with NRF’s revised forecast that 2021 retail sales should grow between 10.5 percent and 13.5 percent over 2020 to between $4.44 trillion and $4.56 trillion.
Total Retail's Take: August's modest sales growth is positive news for retailers as we head into the holiday shopping season. “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," NRF Chief Economist Jack Kleinhenz said. "These results pave the way for sturdy consumer spending and a strong economy in the fourth quarter.”
Although things are looking up, retailers still have more challenges to face heading into the busy fourth quarter, including supply chain delays and labor shortages. A collection of industry experts offered their reactions to August's sales numbers below.
"The increase in vaccinations and re-openings is motivating shoppers to return to their local retailers, creating a demand for retail space past pre-pandemic levels. We're even seeing retailers that thrived during the pandemic gain confidence to expand their footprints to other markets as they see consumers return to pre-pandemic activities. However, now as retail sales rise, we're encouraging our retail clients to plan even further ahead for the impending holiday shopping season. The supply chain issues are creating an inventory shortage in stores, which could bring challenges to consumer shopping lists." — Naveen Jaggi, President Retail Advisory Services, JLL
"Looking long term, supply chain disruption will likely have a continued impact on certain categories, for months and even years to come, prompting brands to evaluate and work closely with their partners. Successful brands will also recognize the opportunity of being able to offer shoppers a variety of options to meet their needs, which includes brick-and-mortar stores where shoppers can experience the product, as well as online options for the convenience of ordering and delivering where and when the shopper wants that product. The impact of the pandemic can be seen not just in raw numbers, but in the habits and expectations of consumers. They're demanding more options, and that's what brands have to provide." — Adam Coyle, CEO, Digital River
"Retail sales saw a .7 percent increase in August as consumers prepared for an in-person back-to-school season. Spurred by a surge in back-to-school shopping, consumer confidence soared as businesses reopen and normalcy returns, indicating the continuation of an economic recovery. The Delta variant has proved to have little effect on consumers who have continued to dine at restaurants and bars, and are expected to continue this behavior into the fall. The approaching holidays also give consumers even more of a reason to spend, giving way to an expected increase next month." — Marwan Forzley, CEO, Veem
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.