-By Ankita Dutta.
The National Retail Federation (NRF) has reported that retail sales in the United States grew month-over-month and year-over-year in April. Clothing and clothing accessory stores declined 0.3% month over month and 4.1% year over year, whereas online sales showed a 1.2% increase month over month and a 6.4% increase year over year. The NRF’s calculation of retail sales, excluding automobile dealers, gasoline stations and restaurants, revealed an increase of 0.6% from March and an unadjusted year-over-year increase of 2%. In March, sales fell 0.7% on the previous month, but increased by 3.4% year on year.
As of April, the NRF’s numbers showed an unadjusted year-over-year increase of 3.7%, based on a three-month moving average. The CEO of NRF, Matthew Shay, mentioned that the rise in retail sales during April indicated that consumers were resilient despite the increased economic uncertainty. According to Shay, prices have been stabilizing, an ongoing strong job market and improved wages have led to a boost in consumer spending power; however, consumers remain cautious and uneasy regarding the current economic climate.
In response, retailers are offering competitive prices and increased convenience to assist budget-conscious consumers. NRF’s Chief Economist, Jack Kleinhenz, stated that although consumers had remained engaged in April, they were being selective and sensitive to price. Kleinhenz expects that spending will see modest gains through the year and anticipates that year-over-year growth will continue to recover, but at a slower pace. One reason for the slowdown in year-over-year growth is the tightening of credit conditions, and also an early indication that excess savings are starting to shrink.
As per the findings of the US Census Bureau, retail sales on the whole saw a rise of 0.4% in April in comparison to March, and a yearly rise of 1.6%. In March, sales fell 0.7% over the previous month, but were were up 2.4% year over year.
Despite the rebound in retail sales, the retail sector is still facing challenges. The threat of further tariffs on Chinese imports is still hanging over the head of retailers, a factor that has the potential to give way to price increases in the coming months. In addition, the closure of some major retailers has weighed on the industry, and the shift towards online shopping has required traditional retailers to make adaptations and speed up their transformation.
Nevertheless, the NRF president and CEO remains optimistic that retail sales will continue to grow in the coming months. However, it’s clear that in order to maintain customer loyalty and attract new shoppers, retailers will have to continue focusing on pricing strategy, convenience, technology advancements, and an improved in-store shopping experience.
