Retail sales make strong rebound in August

Sales at retail stores surged in August despite supply chain issues and concern over the spreading Delta variant.

Retail sales rose 2.3% in August from July and were up 12% year-over-year, according to the National Retail Federation. That compared with a month-over-month decrease of 1.8% and a year-over-year increase of 8.9% in July. (NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants.)

August sales were up in all but two categories — sporting goods and electronics/appliance stores — on a monthly basis. The increase was led by strong gains online and in furniture/ home furnishings stores.

“The consumer remains rock solid despite the trifecta of macroeconomic headwinds we’ve seen this year, including tapering off of government stimulus, elevated COVID-19 infections and ongoing supply chain challenges in the form of shortages of labor and goods,” said NRF chief economist Jack Kleinhenz.

The higher sales came even amid a disjointed back-to-school season as many school districts returned to in-person learning but some delayed classes until after Labor Day, noted Kleinhenz.

“These results pave the way for sturdy consumer spending and a strong economy in the fourth quarter,” he said.

[Read More: Retail sales to exceed $4.44 trillion in 2021, as NRF revises annual forecast upward]

The August sales report comes amid a flurry of surveys — including most recently Deloitte and Mastercard SpendingPulse — that all forecast strong holiday growth for retailers.

While most experts are predicting a happy holiday for retailers, concerns are growing about possible supply chain issues that could impact the season.

“As retail sales rise, we are encouraging our retail clients to plan even further ahead for the impending holiday shopping season,” said Naveen Jaggi, president, Retail Advisory Services, JLL. “The supply chain issues are creating an inventory shortage in stores, which could bring challenges to consumer shopping lists. Some retailers are hoping to help alleviate this challenge by providing clear communications to their customers via email updates that outline the delays in their supply chain and how this could impact order fulfillment.”

Specifics from key retail sectors for August are below.

• Clothing and clothing accessory stores were up 0.1% month-over-month seasonally adjusted and up 36.6% unadjusted year-over-year. 
• Sporting goods stores were down 2.7% month-over-month seasonally adjusted but up 20.3% unadjusted year-over-year.
• Electronics and appliance stores were down 3.1% month-over-month seasonally adjusted but up 18% unadjusted year-over-year.
• Furniture and home furnishings stores were up 3.7% month-over-month seasonally adjusted and up 16.1% unadjusted year-over-year.
• General merchandise stores were up 3.5% month-over-month seasonally adjusted and up 13.6% unadjusted year-over-year.
• Health and personal care stores were up 0.2% month-over-month seasonally adjusted and up 10.6% unadjusted year-over-year.
• Online and other non-store sales were up 5.3% month-over-month seasonally adjusted and up 10.6% unadjusted year-over-year.
• Building materials and garden supply stores were up 0.9% month-over-month seasonally adjusted and up 8.8% unadjusted year-over-year.
• Grocery and beverage stores were up 1.8% month-over-month seasonally adjusted and up 4.8% unadjusted year-over-year.