Financials

July Retail Sales Slump Amid Delta Variant Rise

FinancialsAug 24, 2021

July Retail Sales Slump Amid Delta Variant Rise

Despite the monthly dip, the National Retail Federation remains optimistic about the year ahead.

Retail sales in July were down 1.1 percent month-over-month, according to data from the U.S. Department of Commerce, as the Delta variant of the coronavirus troubled consumers.
New York—Retail sales dipped in July as the Delta variant spooked consumers and spending continued to shift toward services.

Overall, U.S. retail sales were down 1.1 percent month-over-month in July to $617.7 billion, according to data from the U.S. Department of Commerce, while year-over-year sales were up nearly 16 percent.
 
The results fell short of analyst expectations of a monthly decline of 0.3 percent.
 
Sales in June were up 0.7 percent month-over-month and up 18.7 percent year-over-year, as per the revised figures.
 
“July retail sales showed slight deceleration in spending, but nothing to derail our outlook for a record year,” said National Retail Federation President and CEO Matthew Shay in a press release about the results.

“Though the Delta variant is presenting health challenges while supply chain disruptions along with unfilled job openings are presenting business challenges, the consumer and broader economy continue to display steady strength aided by advanced tax credit payments and strong gains in the labor market and personal incomes.”

Part of President Joe Biden’s American Rescue Plan, the tax credit meant most families will receive automatic monthly payments of $250-$300 per child. The program began July 15, marking the first of six monthly payments.

Shay said the retail organization remains optimistic and foresees strong growth heading into the fall.

NRF Chief Economist Jack Kleinhenz shared those sentiments, noting that despite the monthly decline, the economy “has rebounded quite well and is more than just on the mend.”

Though there have been recent price increases due to constraints in the supply chain, it hasn’t put a damper on consumer demand, he said.

“If retailers could find more inventory, they could sell it,” said Kleinhenz.

“Going forward, consumers are a bit fearful again as we approach another possible wave of COVID-19 infections, but they’ve learned to live with the virus and shopping continues.”

 Related stories will be right here … 

Though the variant could impact local markets where vaccination rates are low, Kleinhenz said it is unlikely to show up in the national data.

The shift of spending toward services was expected, said the NRF, noting that because Amazon’s Prime Day happened in June this year rather than its usual July, that may have shifted some spending to the previous month.

Kleinhenz noted “consumer finances are in good shape with a cushion from paying off debt and building up savings.”

Employment and wages have posted back-to-back gains while the child tax credit is also expected to bolster spending.

Back-to-school spending, credited with boosting July’s numbers, is expected to carry over into August as well.

The NRF also calculates retail sales, excluding auto sales, gas stations, and restaurants.

Its calculations also show July retail sales were down 1.1 percent seasonally adjusted from June, but said sales were up 9.5 percent unadjusted year-over-year.

July retail sales were down year-over-year in all categories except electronic and appliances (up 0.3 percent) and health and personal care (up 0.1 percent.)

For the year so far, sales are up 15.5 percent year-over-year, as per the NRF’s calculations.

The results are in line with its revised forecast that 2021 retail sales should grow between 10.5 and 13.5 percent over 2020 to between $4.44 trillion and $4.56 trillion.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

WatchesJan 24, 2022
These Were the Top 5 Watch Brands of 2021 on Chrono24

Two of the brands in the top slots may come as a surprise.

SourcingJan 24, 2022
How One Collaboration Is Trying to Bring More American Gems to Museums

“American Gemstones” wants to raise appreciation of the stones, and those who mine and cut them, even more.

TechnologyJan 24, 2022
Reshyne Aims to Put Modern Shine on Jewelry Repairs

The platform helps jewelers manage and track repairs via their website and allows customers to place orders online.

Brought to you by
Swarovski Created Diamonds – A Brilliant Partnership

A tantalizingly beautiful and carbon-neutral choice, Swarovski Created Diamonds are an extension of the beloved brand’s personality and value.

MajorsJan 24, 2022
Kendall Jenner Fronts the Latest Messika Campaign

It portrays a modern “alpha female.”

Weekly QuizJan 21, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
CollectionsJan 21, 2022
Piece of the Week: Emily P. Wheeler’s Heart Necklace

It’s a whimsical update to a classic riviere.

SourcingJan 21, 2022
Stephen Lussier to Retire After 37 Years With De Beers

Tiffany executive Mark Jacheet will succeed Lussier, who officially steps down in April.

Brought to you by
Melee the Show Launches Tucson Event, Returns to New York in 2022

The boutique tradeshow, happening first in Tucson then New York City, brings together upscale designers from around the world.

Recorded WebinarsJan 21, 2022
Watch: What the Industry Can Expect for Tucson 2022

National Jeweler chats with three colored stone dealers on recent buying activity and what that could mean for the upcoming gem shows.

×