March Retail Sales Increase 0.5% Amid Inflation Jump
Retail sales in March climbed 0.5 percent from the previous month, slightly less than the 0.6 percent Dow Jones estimate and a deceleration from the upwardly revised 0.8 percent gain in February. The data came with inflation rising 1.1 percent for the month as measured by the consumer price index. Inflation rose to its highest level since late 1981, according to government data released Thursday. Online sales slumped sharply, falling 6.4 percent for the month. However, this is likely correlated to consumers' increased in-store purchasing activity. Retail sales broadly rose 6.9 percent year-over-year.
Total Retail's Take: We received reaction to the announced March retail sales numbers from a host of industry analysts and influencers. Here's a sampling of those:
"March came out strong with diversified consumer spending and retail gains across all sectors, with a heavy focus on fuel and convenience spending driven by inflation. Sales continued to grow more when compared to last year as consumers resume in-person activity and travel, despite the continued increase in prices. As we head into Q2, I don’t anticipate there to be a continued confidence in spending as inflation concerns are top of mind for most consumers and won’t be going away any time soon." — Marwan Forzley, CEO, Veem
"Despite the rise in consumer prices, in-store retail sales continue to rebound YoY, signaling consumers are returning to a balanced level of spending across the retail sector. Looking ahead, we expect retail sales to grow between 5 [percent] and 7 percent this year, as Americans shift spending to restaurants, return-to-work clothes, trips, back-to-school clothing, and holidays. According to JLL Research, shopping center foot traffic rose 14.7 percent from February to March 2022, and we can expect urban mall traffic to slowly follow and return to pre-pandemic levels." — Naveen Jaggi, President Retail Advisory Services, JLL
"While prices soared in March and eroded spending power, shoppers remained resilient and sales were healthy. Consumers have the willingness to spend and their ability to do so has been supported by rapid hiring, increased wages, larger-than-usual tax refunds and the use of credit. They are largely dealing with the shock of gas prices but will be facing higher interest rates as the Federal Reserve tightens monetary policy in the coming months. The challenge for the Fed is to cool off demand without pushing the economy into a dramatic slowdown." — Jack Kleinhenz, Chief Economist, National Retail Federation