American shoppers have clear eyes and full carts — and retailers think they can’t lose
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Gonna pop some tags… Fresh #s last week painted a picture of Americans’ spending habits. The gist: they’re spendin’. Retail sales surged 1% last month, 3x more than expected, as consumers splurged on big-ticket items like cars and electronics. Stocks jumped after news of the July spending rebound (retail sales had ticked down in June). Walmart reported the same vibe last week: the world’s largest retailer boosted its annual forecast after unloading 5% quarterly sales growth (online sales jumped 20%).
Shoppers aren’t just buying groceries: Walmart’s merch sales (sun dresses, air fryers, plastic plants) grew for the first time in nearly three years.
Treasure hunt: Earnings from discount rivals Target, Macy’s, Ross, and TJ Maxx this week could boost or tame retail hype.
I’m working late… cuz I’m in retail. Retailers have reason to feel optimistic: inflation’s continued to cool and interest rates are expected to come down, which could give wallets more wiggle room. Walmart, Target, and Best Buy have hosted Prime Day-rivaling summer sales events or cut prices on thousands of items. Economists have reined in their recession fears, with most predicting a soft landing. But it’s not all rosy: Home Depot slashed its annual sales forecast and warned of weaker spending to come after consumers cut back on big renovation projects. As Americans’ credit-card debt hits a record $1.1T and the labor market cools, a spending pullback could be in the carts.
Spending is a mixed shopping bag… It’s hard to tie a neat bow on all American consumers. A boost in some retailers’ sales could indicate that wealthier shoppers are trading down (Walmart said most of its growth came from higher-income households). Meantime, lower-income shoppers might be continuing to tighten their budgets — because cooling inflation ≠ falling prices. To rev up demand, retailers are stocking up extra early for the holiday season (#summerween).