U.S. retail sales were flat compared to month-earlier levels in July, reaching $682.8 billion as consumers remained cautious about their spending amid lingering inflation, the Commerce Department reported Wednesday.
The numbers, which include spending on food services outside the home, showed a 10.1% rise from the year earlier. While consumers have seen relief in the past few weeks in the form of falling gasoline prices, last month's spending at gas stations was still up 39.9% from July 2021.
Gas station outlays are up 40.6% for the first seven months of 2022. After that, the biggest year-over-year spending increases for the January-July period were seen at clothing and accessory stores, up 8.7%, with spending at food and beverage stores rising 7.8% and 6.3% at building material and supply stores. Spending was down 4.9% at electronics and appliance stores.
Most major U.S. big-box retailers are now reporting lower earnings or cutting future profit projections in the face of rising supply, labor and other costs associated with merchandise recalibrations and price markdowns on slow-selling items. Wall Street initially reacted to declining profits this week by sending Target’s share price down sharply, though Walmart and Home Depot showed signs of a stock rebound after posting encouraging if not stellar earnings reports.
Real estate impacts are yet to be seen. Retail analyst Patrick McKeever, founder of news and research site The Daily on Retail, reported last week that announcements of planned chain store openings in the first half of 2022 totaled 5,080 — similar to the same period of 2021. Closing announcements, at 895, were down 63% from the year-earlier period.
“As has been the case for some time now, opening announcements have been concentrated in the discount/dollar and off-price sectors, which can be less vulnerable to online competition and less translatable to e-commerce than other areas of retail,” McKeever said in an Aug. 11 blog post on the National Retail Federation trade group website.