Americans’ retail spending slowed in August as additional unemployment benefits were reduced for millions. Retail sales rose 0.6% in August over prior month. Although August was the fourth straight month of sales growth, it was lower than the expected growth of 1.0%. The report follows data earlier this month showing unemployment of 8.4% in August. With the expiration of the additional $600 unemployment subsidy, Americans are rejoining the workforce.

August is known as the “back to school month,” hence the increase in clothing, electronics, and furniture. With the gradual reopening of restaurant, food and drinking places are also noticing sales growth. However, although grocery store sales are up 9.0% over August 2019, sales are down 1.6% compared to July.

July’s retail sales were also revised down to a 0.9% increase from the 1.2% previously reported. Management at Walmart and Target indicating the decrease in sales in late July and early August could be attributed to the expiration of supplemental unemployment assistance.

Meanwhile, consumers who continue to work from home, are spending much more on home improvement projects, including improving their workspaces. Many of these consumers are saving many by not eating out at restaurants; instead they are buying furniture.

According to research firms Affinity Solutions and Opportunity Insights, debit and credit card data shows that overall spending is down over 7.3% at the end of August, indicating that September could show sluggish sales growth.

As consumer behaviors and retail spending patterns evolve, retail sales are likely to experience categorical surges. Watch for our analysis and predictions as we continue to track trends over the coming months.

Major Retailers Who Have Filed Bankruptcy During the Coronavirus Pandemic

• Town Sports International (Sept 14), gym chain
• Century 21 Department Stores (Sept 10), department store with 13 locations
• Stein Mart (August 12), off-price department store
• Tailored Brands (August 2), Suiting (Jos. A Bank & Men’s Wearhouse)
• Lord & Taylor (August 2), nation’s oldest department store
• California Pizza Kitchen (July 30), pizza-themed restaurant chain
• Ascena (July 23), Women’s and girls clothing brands
• Muji (July 11), Japanese retailer of household goods and apparel
• Sur La Table (July 8), French-inspired cookware retailer
• Brooks Brothers (July 8), classic suit brand
• Lucky Brand (July 3), Denim and apparel retailer
• Cirque du Soleil (June 29), acrobatics and entertainment group
• CEC Entertainment (June 24), parent company of Chuck E. Cheese
• GNC (June 23), Vitamin and supplement shop with 3,000 stores
• 24 Hour Fitness (June 14), Gym with 400 locations
• Le Pain Quotidien (May 27), French bakery chain
• Tuesday Morning (May 27), Discount off-price retailer
• JC Penney (May 16), Department store
• Stage Stores (May 10), Department store
• Neiman Marcus (May 7), Luxury department store
• J. Crew (May 4), Clothing brand
• Gold’s Gym (May 4), Gym with 700 locations
• Cinemax Cinemas (April 25), Movie theatre chain
• True Religion Apparel (April 13), Clothing brand
• FoodFirst, Bravo, and Brio (April 10), Restaurant chains
• Apex Parks (April 8), Entertainment and water parks
• Dean & Deluca (March 31), Gourmet foods retailer

Interested in learning more on the state of retail? Connect with Stream’s retail advisory team, who can provide resources and insights.

The post August Retail Spending Report – Growth Slower Than Expected appeared first on Stream Realty Partners.

Americans’ retail spending surpassed pre-pandemic levels in July as spending surged on electronics to help people stay entertained at home and appliances for home remodels. Sales have finally slowed on exercise gear and outdoor equipment such as kayaks and weights.

The U.S. is slowly recovering from the sharpest economic contraction in modern history. Consumers are still spending, despite numerous reimposed restrictions on public gatherings and store closures. Many economists attributed the increase in retail sales over the past three months to a $600 weekly unemployment benefits supplement from the government, which amounted to almost $75 billion in July. The supplement ended on July 31, leaving economists to expect a decline in retail sales in August.

“Similar to the jobs report, retail sales stand in stark contrast to the idea that growth in July ‘stalled’ – when in fact it continued at a robust, if somewhat slower, pace,” Citigroup economist Andrew Hollenhorst said in a note. Retail sales are considered a barometer for the U.S. economy, where two-thirds of its activity is driven by consumer spending. After accounting for seasonal factors, sales were 1.7% higher compared to February, the month before the pandemic shut down much of the economy. According to data analytics firm SafeGraph Inc, foot traffic in retail stores, which declined six weeks ago coinciding with the final distribution of stimulus checks, have since remained steady.

August retail sales will likely be heavily scrutinized. The $600 weekly unemployment benefit expired at the end of July; the President and Congress are at an impass over a new stimulus package that will likely not be resolved for a few weeks. The unemployment rate, despite dropping in July, remains historically high at 10.2%.

As consumer behaviors and retail spending patterns evolve, retail sales are likely to experience categorical surges. Watch for our analysis and predictions as we continue to track trends over the coming months.

Major Retailers Who Have Filed Bankruptcy During the Coronavirus Pandemic

• Stein Mart (August 12), off-price department store
• Tailored Brands (August 2), Suiting (Jos. A Bank & Men’s Wearhouse)
• Lord & Taylor (August 2), nation’s oldest department store
• California Pizza Kitchen (July 30), pizza-themed restaurant chain
• Ascena (July 23), Women’s and girls clothing brands
• Muji (July 11), Japanese retailer of household goods and apparel
• Sur La Table (July 8), French-inspired cookware retailer
• Brooks Brothers (July 8), classic suit brand
• Lucky Brand (July 3), Denim and apparel retailer
• Cirque du Soleil (June 29), acrobatics and entertainment group
• CEC Entertainment (June 24), parent company of Chuck E. Cheese
• GNC (June 23), Vitamin and supplement shop with 3,000 stores
• 24 Hour Fitness (June 14), Gym with 400 locations
• Le Pain Quotidien (May 27), French bakery chain
• Tuesday Morning (May 27), Discount off-price retailer
• JC Penney (May 16), Department store
• Stage Stores (May 10), Department store
• Neiman Marcus (May 7), Luxury department store
• J. Crew (May 4), Clothing brand
• Gold’s Gym (May 4), Gym with 700 locations
• Cinemax Cinemas (April 25), Movie theatre chain
• True Religion Apparel (April 13), Clothing brand
• FoodFirst, Bravo, and Brio (April 10), Restaurant chains
• Apex Parks (April 8), Entertainment and water parks
• Dean & Deluca (March 31), Gourmet foods retailer

Interested in learning more on the state of retail? Connect with our team.

The post July Retail Spending Above Pre-Pandemic Levels appeared first on Stream Realty Partners.

As predicted, June’s retail sales data is the strongest since the stay-at-home orders began. Sales in June grew 7.5% over the prior month, or 7.3% excluding auto sales, and we are now approaching pre-pandemic level of sales. After accounting for inflation, real sales growth (excluding auto sales) in June were down only 1.1% over the same month last year. This data indicates a “V” shaped economic recovery, however the recent retail closures in some states will pump the brakes on a quick rebound.

Interestingly, e-commerce sales are down 2.4% over prior month, indicating a shift in consumer attitudes and buying patterns. Consumers are looking to spend discretionary capital at physical retail locations.

Clothing stores continue to struggle to bounce-back. Although the sales have grown substantially since the stay-at-home orders started, they are still down 23% over the prior year. The same can be said for both electronics and furniture stores, down 13% and 4% over prior year, respectively.

Restaurant revenue rose for the second consecutive month in June as local economies eased restrictions. June represented the highest monthly sales volume since the beginning of the pandemic but are still down 28% from pre-pandemic.

Grocery stores and building materials represent the gains during the pandemic. Since June 2019, grocery store sales are up 12% and building material stores are up over 17%.

Potential Downsizing Many traditional retailers are planning on reducing their footprint, while some envision a “showroom” style store. Examples include:

• JCPenney plans to layoff a thousand corporate employees as it reduces its footprint
• Wells Fargo, the bank with the most retail locations, is planning to close hundreds of locations
• Gold’s Gym is restructuring to focus on smaller urban locations
• Pier 1 is expected to be sold to an e-commerce venture with direct-to-consumer only sales
• Bed Bath and Beyond is closing 200 of its 1,500 stores, as sales are down 49%

Major Retailers Who Have Filed Bankruptcy During the Coronavirus Pandemic

• Sur La Table (July 8), French-inspired cookware retailer
• Brooks Brothers (July 8), classic suit brand
• Lucky Brand (July 3), Denim and apparel retailer
• Cirque du Soleil (June 29), acrobatics and entertainment group
• CEC Entertainment (June 24), parent company of Chuck E. Cheese
• GNC (June 23), Vitamin and supplement shop with 3,000 stores
• 24 Hour Fitness (June 14), Gym with 400 locations
• Le Pain Quotidien (May 27), French bakery chain
• Tuesday Morning (May 27), Discount off-price retailer
• JC Penney (May 16), Department store
• Stage Stores (May 10), Department store
• Neiman Marcus (May 7), Luxury department store
• J. Crew (May 4), Clothing brand
• Gold’s Gym (May 4), Gym with 700 locations
• Cinemax Cinemas (April 25), Movie theatre chain
• True Religion Apparel (April 13), Clothing brand
• FoodFirst, Bravo, and Brio (April 10), Restaurant chains
• Apex Parks (April 8), Entertainment and water parks
• Dean & Deluca (March 31), Gourmet foods retailer

Interested in learning more on the state of retail? Connect with our teams.

The post Retail Sales Continue to Climb in June appeared first on Stream Realty Partners.