The U.S. Commerce Department reported last week that retail sales in GAFS category, which includes most general merchandise categories, rose 5.9% over last year and were flat compared to May of this year. Total retail sales had jumped 7.6% versus last, due primary to a 22.5% increase in gasoline station sales. At Sporting Goods, Hobby, Book, and Music stores, June sales rose 4.0% versus June last year, but were up just 1.5% on an adjusted basis. General Merchandise stores saw sales were up 6.7% on an adjusted basis versus last year. The numbers for Shoe Stores were not available.
The National Retail Federation thinks that rising gas prices are finally taking a toll on consumers and retailers. “It's not surprising that consumers took a breather last month due to higher gas prices and unseasonable weather,” said NRF chief economist Rosalind Wells. “Retailers will look to the back-to-school season to offset June's sluggish sales.”
The NRF had issued an upbeat assessment for the year before the USCD issued their report on Thursday.
According to its forthcoming Retail Sales Outlook report, NRF is revising its 2004 forecast from 5.0% growth to 6.0% growth due to phenomenal 9.0% GAFS sales growth in the first five months of this year. GAFS sales increased 3.9% in 2003.
First quarter GAFS sales increased 9.9%. GAFS sales for May were revised to 5.5% year-over-year growth, bringing second quarter sales up 6.7%.
In upping their forecast earlier in the week, the NRF said that a “long-awaited turnaround in employment has been the newest economic indicator to fall into place”, citing the creation of 1.3 million jobs in the first half of the year.
But the retail group appeared to balance that optimism against the realities of the USCD numbers late I the week. Regardless of wages, Americans only have a certain amount of disposable income each month. When they are forced to spend unallocated dollars on gasoline, they are unable to spend their money on other merchandise,” NRF president and CEO Tracy Mullin.
