US retail sales, excluding foodservice, automotive, and gasoline, increased by 3% year-on-year in April, according to research agency GlobalData Retail.
Neil Saunders, managing director of GlobalData Retail, said that these figures "serve as a timely reminder that all is not gloomy in the world of retail", and there is no sign that spending is slowing down to any significant degree.
Changes in spending habits
"Retail is in a state of flux and is facing many challenges, but the source of these difficulties is not, primarily, a function of consumers spending less," said Saunders.
"Rather, they are the consequence of a change in where consumers spend that money. As the distribution shifts, it is causing significant pain for the losers and is forcing all retailers to reassess their routes to market," he added.
"That the root of the problems is not a slowdown in spending is a positive thing. It underlines the fact that there are gains to be made - but only for those retailers savvy enough to adapt and respond."
Performance
The figures show that department store sales fell by 1.2% in April, whereas non-store retailers experienced an increase of 9.4%. Clothing retailers saw an increase of 1.7%, sales of electrical goods were virtually flat, falling by only 0.1%, and sports retailers saw sales decrease by 3.3%
Saunders said that despite a solid retail performance overall, "many retailers will argue that growth levels are simply too low to benefit and sustain all retailers."
"There is some truth in this," he continued. "Growth levels remain lower than they were before the financial crisis. However, this is nothing new and, in our view, it is unlikely we will ever get back to the seemingly halcyon days of 5% growth that were common before 2008."
Future trajectory
Saunders said that he expects the future trajectory of sales growth to be "reasonable and steady".
"As much as we do see some forward pressures on household finances, we also see positives from continued low gas prices, relatively full employment, and some modest gains in wages."
"This steadiness in growth is a good thing - if only because a slowdown in spending, coupled with all the structural change occurring in retail, would produce a very real crisis," he concluded.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
