After an unusually strong winter driven by sales of warm weather attire and bright, trendy fashions, a rocky spring followed, making it anyone’s best guess for what retailers would see from shoppers entering the dog days of summer. Dog days might be an understatement this year, with one of the hottest July’s on record combined with extreme drought conditions for many states across the country. The Commerce Department in July reported that June retail sales missed expectations, showing a consumer who was clearly hesitant to spend on anything other than the essentials, such as health and personal care items and grocery products. At that time, NRF’s Chief Economist Jack Kleinhenz stated that the data was “discouraging but not demoralizing.”
Now we’re more than halfway through August, and things are trending up again. According to NRF, July retail sales increased 0.8 percent from the previous month and 1.2 percent year-over-year. This increase can in large part be attributed to the back-to-school shopping season. Traffic at major U.S. retail ports is also expected to rise more than 6 percent this August over last year as retailers begin to stock up for the holidays ahead. Combined, July and August make up a very important time in the retail industry. Second only to the winter holidays, back-to-school and college is one of the biggest consumer spending events of the year. And this year is no exception, with the average person with school-aged children planning to spend about $688 on everything from school supplies and denim pants to laptops and footwear. Add in what people will spend on their college student – an average of $907 – and total combined spending on school and college merchandise will top $83 billion.
There’s no question of retail’s role in powering the economy, and from the looks of July it appears consumers have the desire and ability to spend – albeit smartly – again. Next month’s retail sales results should give us a good idea about how the other half of the back-to-school season fared.
NRF Senior Vice President Ellen Davis recently joined AP’s Mark Hamrick at their studio to talk about this and the latest retail sales report. Check out the video below.