NPD: Changes in consumer spend have just started

U.S. retail results saw a brief dip in early-mid July, but otherwise have continued to show positive comparisons to both 2020 and 2019. 

Dollar sales of U.S. discretionary general merchandise rose 10% in the week ending July 31, 2021 over the same period two years ago, and 12% over 2020, according to “Retail Early Indicator” data from NPD.  The data also showed the beginnings of some back-to-school shopping-influence growth in accessories, apparel, footwear, beauty and office supplies. 

In other results, mall appliances and housewares are dragging compared to last year’s strong growth, but growing double digits versus pre-pandemic levels. While still not in full swing at the time the data was recorded, back-to-college may be having a bigger impact than it did two years ago – a consequence of last year’s delays in incoming college freshmen moving to on- or off-campus housing.

“Recent results are a prelude to the retail shifts expected over the next few months,” said Marshal Cohen, chief retail industry advisor, NPD. “The traditional September lull in retail spending was disrupted in 2020, with an even more dramatic shift expected in 2021 – though the uncertainty surrounding the Delta variant has made the timing and nature of what consumers buy, and where and how they shop, more ambiguous.”

Looming over the factors expected to impact retail in September and beyond are the new developments and uncertainty related to the Delta variant of the COVID-19 virus, which will continue to change the retail dynamic through this period and yet another unique holiday shopping season, advised Cohen.

“These interruptions underscore the importance of not trying to anticipate marketplace activity but rather being nimble in reaction to it,” he said.