Expert Commentary: May retail sales

The U.S. Census Bureau released its advanced monthly retail trade report for May 2023, which showed sales totaled $686.6 billion, up 0.3% from the previous month, and up 1.6% from May 2022.

Additionally, total sales for the March 2023 through May 2023 period are above 1.7% from the same period a year ago.

The retail sales report reflects consumer spending resilience despite economic uncertainty. Spending grew across every category besides gasoline stations and miscellaneous stores. However, the decline in gasoline prices was a major driver for consumers to spend elsewhere.

The most notable increase happened in the building material and gardening supplies category, a 2.2% increase from last month.

Retail foot traffic saw mostly positive results in May and continues to stay consistent this year, according to Placer.ai. Some categories such as theater, attractions, pet stores and sporting goods saw month-over-month declines. But many categories saw traffic growth such as home improvement, discount and dollar stores, fitness, gas stations, department stores and grocery. This shows that many consumers are still engaging with physical stores and showing solid demand as they faced high interest rates.

Overall, retail sales, including restaurants, which rose 1.6% from the previous year, shows consumers are still spending and shifting to experiences. In the fourth quarter 2022, spending on dining out in the U.S. grew by 13.7% year-over-year and spending at amusement parks and arcades grew by 20.6% year-over-year, according to JLL’s recent entertainment report. 

A growing number of entertainment concepts are hoping to meet the demand of consumers spending more on food and fun by opening new locations. JLL has identified 9.1 million square feet of new entertainment space slated to open in the U.S. and Canada within the next two years.