Retail sales saw a 3% year-over-year increase in September, driven by a strong 7.6% growth in e-commerce, according to data released by the U.S. Department of Commerce. This performance has once again confounded analysts, as U.S. consumers have consistently defied predictions throughout the year.
Wells Fargo economists Tim Quinlan and Shannon Seery Grein noted that those expecting signs of a slowdown in consumer spending would be disappointed by September’s retail sales report. Despite subdued consumer confidence over the past few months, spending has remained resilient.
Richard de Chazal, a macro analyst at William Blair, pointed out that although consumer sentiment has been lukewarm, spending patterns tell a different story. Consumers are still spending, albeit somewhat reluctantly. Furthermore, there has been no significant shift from discretionary spending towards essentials, indicating that spending behaviour remains steady across various categories.
While the overall picture for retail was positive, not all segments performed well. The home goods sector dropped by 5.3%, electronics sales decreased by 6.6%, and sporting goods and hobby stores experienced a 7% decline. On the other hand, apparel sales saw a modest 0.3% increase. However, department stores, which largely stock clothing and footwear, saw their sales fall by 2.4%.
Nikki Baird, vice president of strategy and product at Aptos, commented on the state of the retail industry, suggesting that competition is no longer just between retailers but also extends to experiences like dining and entertainment. She highlighted that the current retail landscape is highly varied, with both winners and losers, largely depending on the quality of the experience offered. Consumers now have much higher expectations for in-store experiences compared to five years ago.
itim Group plc (LON:ITIM) is a SaaS-based technology company that enables store-based retailers to optimise their businesses to improve financial performance and effectively compete with online competitors. Itim adds retail value by helping multi-channel retailers optimise their business and their stores to improve financial performance and compete more effectively with the “Amazons”.
