Retail sales flat in May

Cautious consumers kept spending in check in May.



Retail sales in May were essentially unchanged on a seasonally adjusted basis after an upwardly revised gain of 0.6% in April, according to the National Retail Federation. The NRF numbers exclude automobiles, gasoline stations and restaurants.



In May, sales were 5.3% above the year-ago level on an unadjusted basis and increased four percent on a 3-month moving average year-over-year.



“Consumers continued to show solid purchasing power in May, but they are buying more without spending more,” NRF chief economist Jack Kleinhenz said. “While the month-to-month comparisions may be unimpressive, current trends in retail sales growth are healthy. It is important to note that retail sales over the past three months are four percent higher than they were during the same three-month period last year. The industry is off to a good start in the second quarter and prospects remain in line with our annual forecast for spending.”



Retailers' performance in May was similar across segments, with the electronics sector seeing the biggest losses. On a year-over-year basis, building materials and furnishings have seen the greatest growth, closely followed by online and other non-store sales, and furniture and furnishings.



Neil Saunders, managing director of GlobalData Retail, commented that while consumers becoming a more relaxed in their spending habits, they remain cautious.



"As such, the level of growth posted this month is unlikely to be sustained over the remainder of summer," Saunders said. "This applies in particular if interest rates continue to rise. To date, the impact of rate increases has been small - but from our tracker, more consumers are now becoming concerned about the impact of higher interest payments on their various debts. While our forecast for 2017 remains solid, we maintain our view that growth will be patchy and not benefit all retailers. The pattern of winners and losers is set to continue.



Specific findings from NRF include:

*Online and other non-store sales increased 0.8% seasonally adjusted over April and increased 12.4% unadjusted year-over-year.



*Sales at clothing and accessories stores increased 0.3% seasonally adjusted from April and increased 2.1% unadjusted year-over-year.



*Sales at general merchandise stores decreased 0.3% seasonally adjusted over April but increased 1.3% year-over-year.



*Electronics and appliances stores’ sales decreased 2.8% seasonally adjusted over April but decreased 0.7% unadjusted year-over-year.



*Furniture and home furnishings stores’ sales increased 0.4% seasonally adjusted from April and increased 6.7% unadjusted year-over-year.



*Sales at building materials and supplies stores remained unchanged from April but increased 14.2% unadjusted year-over-year.



*Sporting goods stores’ sales decreased 0.6% seasonally adjusted from April and decreased 2.9% unadjusted year-over-year.



*Sales at health and personal care stores remained unchanged over April but increased 2.2% unadjusted year-over-year.