U.S. retail sales up 7.5% in June, led by apparel purchases 

by Kim Souza ([email protected]) 388 views 

Consumers turned out in droves to purchase apparel in stores and online in June, sending retail sales for the month up 7.5% from the prior month, according to the U.S. Department of Commerce.

Stores selling apparel and accessories reported a sales spike of 105.1% in June, more than triple that of any other category. Consumers were itching to get out to stores and shop last month before the recent surge in new cases of COVID-19 prompted renewed shutdowns in several states.

Electronics stores also did well with a 37.4% uptick in sales last month as consumers continue to work from home and various school districts around the country have said students will not return to classrooms in the fall, requiring virtual education to continue.

With large retailers like Amazon, Walmart and Google recently announcing a large percentage of employees at corporate offices will continue to work from home, there has been continued spending on furniture which rose 32.5% in June. Sales in sports, music and hobby stores rose 26.5% in June, compared to the prior month.

The Commerce Department said spending ticked up 1.1% from the year-ago period and was the first annual increase since the pandemic began earlier this year, which crashed retail sales except for foods and consumables.

Department stores also bounced back in June with 19.8% more sales than in May. This segment has been troubled with Neiman Marcus, J.C. Penney and Stage Stores just a few to file bankruptcy.

Gas station sales also rose in June up 15.3% from May as more consumers were out and about in their cars amid relaxed stay-at-home orders. Big Box retailers like Walmart and Target saw a modest uptick of 2.7% in sales last month. This comes after consumers began to shop other retailers who had previously been closed from mid-March through mid-May in many states. Consumers also spent less on food and online purchases with the categories down 1.6% and 2.4% in June, from the previous month.

Analysts with NPD Group said consumer spending bounced back in May across all types of establishments as states and cities allowed more businesses to open. May spending was up 18.2% across all combined categories, much of which was supported by stimulus checks and padded unemployment benefits which are set to expire this month.

Consumers are expected to spend a combined $33.9 billion on back-to-school purchases, according to the National Retail Federation. The recent survey was more bullish than the report released earlier by Deloitte which called for spending to be mostly flat this year at $28 billion.

“By any measure, this is an unprecedented year with great uncertainty, including how students will get their education this fall whether they are in kindergarten or college,” said Matt Shay, CEO of the NRF.

Shay said parents are navigating the uncertainty by making sure students are prepared with the right tools if learning is forced online.

Analysts with Bernstein recently warned that foot traffic across North America has started to decline as COVID-19 cases resurge. Last week traffic in stores and restaurants were down 43%, Bernstein noted.

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