In July, retail sales increased 1.2% disenchantingly, raising fears about an upturn in economic distress as enhanced unemployment benefits expire in millions of Americans after two months of sharp growth. Consumers pulled back on big-ticket items like cars, building materials and sporting goods in July, but spent more on food, gasoline, and health and beauty products, according to numbers released Friday by the U.S. Commerce Department. Spending increases were generally modest, with one exception: Electronics and appliance stores saw a 23 percent increase from June as families stocked up on laptops, headphones and webcams to prepare for a virtual start to the school year in many parts of the country.
“Gains were extremely uneven,” Diane Swonk, chief economist at Grant Thornton, wrote in a note to clients. “Retail sales showed signs of slowing in July, which underscores our concern that the rebound is losing momentum.” Overall consumer spending inched up to $536 billion, from $529.4 billion in June.
Analyzers say that during the pandemic, consumer purchasing habits changed as more consumers purchase luxury products like shoes , handbags and joys online. At least a dozen large distributors — mostly mall-based chains or shops — have lodged bankruptcy claims since April. Meanwhile, grocery stores are making booming business as Americans eat more and more at home.
Clothing retailers have seen demand decrease in many parts of the country, as parents hold on to purchasing new clothing and shoes for themselves. They are normally gaining great support due to the back to school boom.
Neil Saunders, managing director of GlobalData Retail said that “Where shoppers choose to invest their money, it remains highly uneven. “Although online clothing is doing very well, there are extremely limited visits to clothing shops, in particular those in malls. Impulse purchases and expenditure on other categories has all been washed out, including workwear.’
Service at clothing stores, which increased 5.7% in July, only dropped by 21% compared to last year. Meanwhile departmental revenues have dropped by 13 percent compared to last year, while restaurant spending has declined by 19 percent.