Retail sales show small improvement in September
Consumers continue spending, at a slow pace of growth but ahead of expectations.
Core retail sales in September 2024 rose 0.4% month-over-month and were up 1.7% year-over-year, according to data released Thursday, Oct. 17 by the U.S. Census Bureau. This beat the Dow Jones estimate of 0.3%. (As defined by the National Retail Federation, core retail sales exclude auto dealers, gasoline stations and restaurants.)
September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month-over-month and up 2.4% unadjusted year-over-year. Core retail sales were up 3.3% year-over-year for the first nine months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023.
NRF is also forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
[READ MORE: NRF: Holiday sales, led by e-commerce, may grow to $990 billion in 2024]
Retail trade sales were up 0.3% from August 2024 and up 1.4% from September 2023. Nonstore retailers were up 7.1% from the prior year, while food services and drinking places were up 3.7% from September 2023.
"While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value," said NRF chief economist Jack Kleinhenz. "September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season."
Last week, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported that as interest rates and inflation fell and employment rose, total retail sales, excluding automobiles and gasoline, were down 0.32% seasonally adjusted month-over-month during September.
However, total retail sales grew 0.55% unadjusted year-over-year. These results compare with increases of 0.45% month-over-month and 2.11% year over year in August. (Unlike survey-based numbers collected by the Census Bureau, the Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions.)
In commentary emailed to Chain Store Age, Nikki Baird, VP of strategy & product for Aptos, a retail technology company serving household retail brands, said consumers today have higher expectations for retail experience, particularly in-store, than they did five years ago.
"The American consumer has been more resilient than anyone could have expected," said Baird. "But that isn’t a free pass for retailers to underinvest in their stores. Investments in labor, investments in customer experience tech, investments in digital transformation of the store (are needed)."
"If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere," said Baird. "A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars."
