June Retail Sales Were Flat Overall, But Big-Ticket Items Saw Declines

A flat June reading for retail sales can be a tossup in terms of getting a sense of how the consumer is faring.

The data released Tuesday (July 16) may have come in better than expected — economists had been looking for a month-over-month decline of 0.3% — but digging into the numbers reveals some pullback on big-ticket items. Other categories of discretionary spending got a lift — particularly online.

The overall takeaway might be that coming fully into the summer months, the trends are mixed.

The U.S. Census Bureau reported that non-store retailers — used, generally, as a proxy for eCommerce sales — were up 1.9% month on month.

As to where the dips were, motor vehicles and related parts saw declines of around 2% month on month, and are down 2.2% from June 2023. And though spending on furnishings got a 0.6% bump in June versus May’s levels, that category was still down 4%.

We note that one key discretionary category, the sporting goods/hobby/books category, was 0.1% lower on the month, and is down 3.4% overall.

On an unadjusted basis, retail sales came in at $606 billion, down 5.9% from May and down 0.4% from June of last year; the flat reading is seasonally adjusted and is in line with typical trends.

Where the Spending Was

But the pockets of resilience show, albeit muted in some respects. Might we expect that clothing and apparel would see some spending, given the fact that we’re all getting out and about?

In that segment, sales were up 0.6%, and are 4.3% higher than a year ago. In further underscoring of the movement towards in-person gatherings, Food Service and Drinking places saw sales climb 0.3% in June versus May’s levels. Yet spending at grocery stores was flat during the month, indicating that consumers have allocated their “food dollars” to be used in social settings.

Connect the dots, and we see a consumer that has possibly tuned up the car, bought the frisbees, loaded up on the beach reads … and as we just said, got out and about.

But the pullback from the big-ticket items may be a bit more pronounced and a bit prolonged.  As PYMNTS reported, Big Lots recorded lower-than-expected first-quarter fiscal 2024 financial results, attributing its 10.2% net sales decrease to a slide in spending on big-ticket items, including furniture.

Sixty percent of respondents surveyed by PYMNTS Intelligence have scaled back on nonessential retail purchases due to price increases. And coming into the year, 62% of consumers reported being unlikely to make expensive purchases during the year (outside of gifts, clothing and accessories, vehicles, leisure travel and electronics or appliances).

The chart below, as assembled by PYMNTS, shows just how heady the pace of inflation has been through the last several months and stretching back before the pandemic. Price increases for all retail items, as we calculated, has topped 24% since then.