May a mixed bag for retail sales
WASHINGTON — Retail spending for the month of May experienced a slight drop of 0.2% to $387.1 billion, though the advanced estimates noted that May sales were 7.7% higher than the year-ago period, the U.S. Census Bureau said Tuesday.
The government agency also reported that total sales for the March through May period were up 7.5% from the same period a year ago.
Across retail sectors, grocery stores during May continued on an upward trend, rising 1.7% to nearly $46.7 million, up from $45.9 million in April. Health and personal care stores gained traction after seeing a decline last month of 0.3% — the U.S. Census Bureau said May sales rose 1.3% to $22.8 million.
Although advanced estimates for pharmacies and drug stores are not included in the report, the U.S. Census Bureau reported a decline in sales to about $18.6 million in April, down from nearly $19.9 million in March.
Commenting on the sales results, the National Retail Federation said that the industry isn’t immune to other economic factors, such as employment rates and housing, and that lackluster sales do not come as a surprise to retailers.
"After a string of disappointing government reports relating to economic activity and employment, May’s retail report supports the idea of the economy hitting a soft patch," NRF chief economist Jack Kleinhenz said. "Though consumers are spending cautiously, we are not seeing them cut out new purchases completely, signaling there is a distinct appetite to spend if economic conditions let them."
NRF added that it expected sales to pick up again in time for the back-to-school season, which, according to a PriceGrabber survey, may start later this year.
Consumer spending continues to take a hit, Deloitte Consumer Spending Index finds
NEW YORK — Rising unemployment claims, coupled with rising food and energy prices, prompted a decline in consumer spending outlook for May, according to Deloitte.
The Deloitte Consumer Spending Index, which is comprised of four components — tax burden, initial unemployment claims, real wages and real home prices — fell to 2.66%, from an upwardly revised gain of 3.29% a month ago.
“The labor market indicators are the primary cause of weakness in the index; however, the economy is up against other temporary headwinds that suggest weak growth may persist for the near term,” Deloitte’s chief economist and author of the monthly index Carl Steidtmann said. “Rising food and energy prices continue to hurt real wages, which combined with Americans’ insecurities about the job market, compound the pressure on consumer spending.”
In April, the index experienced the sharpest single-month decline since November 2007.
Consumers likely putting off back-to-school shopping
LOS ANGELES — Back-to-school shopping likely will take place even later this year than in 2010, as consumers hope to score last-minute deals, the latest forecast from PriceGrabber revealed.
PriceGrabber, a part of Experian, found that 95% of consumers are planning to use some sort of money-saving technique when back-to-school shopping, and they plan to start shopping later in 2011 than they did in 2010.
According to the survey, 49% of back-to-school shoppers plan to make purchases in August, compared with 38% who said that in 2010. Only 14% said they will begin shopping in June, versus 26% in 2010.
PriceGrabber found that the reason for the delay is because shoppers want more time to compare prices online and take advantage of last-minute discounts. The survey found that 69% of consumers will shop online or use comparison shopping websites, and 41% will visit retailer websites to print out coupons.
Though shoppers may be delaying their purchases, economic concerns have most saying they will spread them out, with 55% saying they will distribute the cost of purchases over a longer time period.
"While the economic climate is beginning to improve, we are not surprised to see that back-to-school shoppers remain cautiously optimistic," PriceGrabber general manager Graham Jones said. "Further analysis of the data supports the idea that consumers are careful to distribute their purchases over an extended period, if possible. However, shoppers are also becoming increasingly savvy and open to taking advantage of online shopping solutions that they may not have considered in the past, as can be seen by many consumers’ decisions to begin shopping at a later date."
When back-to-school shoppers do get around to making purchases, they will be budget-conscious. Of the consumers who are shopping for back-to-school items this year, 52% planned to spend as much as they did last year, and 35% planned to spend less. Only 13% planned to spend more this year because of the economic recovery.
The survey was conducted between May 12 and 19 and includes responses from 2,612 U.S. online consumers.