U.S. Retail Sales in July Were Resilient With Strong Online Commerce and Mixed Clothing Sales

An It's A Working Title LLC note on macroeconomic trends impacting the retail fashion and luxury sectors

U.S. retail sales in July were up 10.2 percent versus July 2021, according to advance estimates released by the U.S. Census Bureau on August 17. Sales for these initial estimates came in at $682.8 billion, which was roughly unchanged from sales values last month. Though this monthly number was lower than the market median expectation of a 0.1 percent increase, it points to the continued resilience of the U.S. consumer amid significant macroeconomic headwinds. The biggest year-over-year gains were recorded at the gas pump (39.9 percent), food services (11.6 percent), building materials (10.1 percent), and food and beverages (8.4 percent). Clothing and accessories sales were down from last month (-0.6 percent), but showed strength from last July (2.3 percent). Putting these numbers in the context of various segments of the retail clothing market, the luxury and premium end of the retail market has been extremely robust as exhibited in the H1 earnings reports and outlooks, though mid-market and box shops have reported concerns for H2 sales. Digital shopping remains popular. Online sales growth remained strong (2.7 percent y/y) as consumers took advantage of online deals, including a strong Amazon Prime Day. Retailers looking to remain in a strong position amid continued macroeconomic uncertainties would do well to continue to align their product offerings and content strategies to ensure that consumers can seamlessly navigate their shopping across distribution channels.