In what retailers hope is a preview of the holiday shopping season, retail sales from the critical back-to-school month of August increased by 0.7% on the month, according to data released by the U.S. Census Bureau on Thursday. When autos are excluded, that gain was a robust 1.8%.
The August figure easily beat the Bloomberg consensus forecast of a 0.8% decline, and was a reversal from July’s downwardly revised decline of 1.8%.
The focus on back-to-school shopping helped raise general merchandise sales (3.5% month over month), and the high increase in nonstore retailers (5.3%) reinforces consumers’ comfort with shopping online. In addition, it’s apparent to see the impact of the delta variant in the data with restaurant numbers remaining flat. The largest declines came from auto sales and electronics stores as consumers wait out supply shortages and increased costs for non-essential items.
The gains were large enough to bring the three-month annualized pace close to flat for retail sales, but volatility has made it difficult to spot the signal through the noise since the pandemic began. However, with vaccination numbers continuing to climb, and hopes that the delta variant spike will soon subside, the strong back-to-school results could serve as a positive sign for the coming holiday sales season.
The one thing with virtual certainty in an uncertain environment is that the holiday sales season will likely see another increase in sales through non-brick and mortar channels as changes to consumer preferences, accelerated by the start of the pandemic, become part of the new normal.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.