US July Retail Sales Slow Amid Tight Supply Chain: NRF

Retail sales slowed during July as retailers continued to face supply chain disruptions and increased Covid-19 vaccinations allowed consumers to shift some spending from goods to activities like going out to dinner and traveling despite the delta variant, the National Retail Federation (NRF) reported.

NRF President and CEO Matthew Shay said, “July retail sales showed slight deceleration in spending, but nothing to derail our outlook for a record year. Though the delta variant is presenting health challenges while supply chain disruptions along with unfilled job openings are presenting business challenges, the consumer and broader economy continue to display steady strength aided by advanced tax credit payments and strong gains in the labour market and personal incomes.

NRF Chief Economist Jack Kleinhenz added, “Despite this monthly dip, the economy has rebounded quite well and is more than just on the mend. The consumer has continued to be resilient and recent price increases brought on by constraints in the supply chain have not dampened the robust demand seen during the past year. If retailers could find more inventory, they could sell it.

The US Census Bureau said overall retail sales in July were down 1.1% seasonally adjusted from June but up 15.8% year-over-year. That compares with an increase of 0.7% month-over-month and an increase of 18.7% year-over-year in June. 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 – also showed July was down 1.1% seasonally adjusted from June but showed that the month was up 9.5% unadjusted year-over-year. That compared with a month-over-month increase of 1.1% and a year-over-year increase of 12.8% in June. NRF’s numbers were up 13% unadjusted year-over-year on a three-month moving average. For the first seven months of the year, sales as calculated by NRF were up 15.5% over the same period in 2020. That is consistent with NRF’s revised forecast that 2021 retail sales should grow between 10.5% and 13.5% over 2020 to between $4.44 trillion and $4.56 trillion.

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