Retail Sales

Back-to-School Shopping and Summer
Travel a Boon for Brick-and-Mortar Retail  

Thrifty consumers purchasing school supplies well in advance. Store-based retail sales, which exclude purchases made online and at restaurants and bars, rose 0.6 percent in July — the largest monthly gain since January. An earlier start to the back-to-school shopping season aided retailers last month, with combined spending across the apparel and sporting goods categories setting an all-time high for July. Department store sales also rose 0.9 percent, following declines in four of the past five months. Spending increases across these segments reflect households' attempts to mitigate the impacts of higher-priced school items with promotions and discounts offered by retailers. Back-to-school forecasts indicate this store-based sales momentum may carry over into August, as households are expected to spend a record $41.5 billion on supplies and clothing this year.    

Heightened travel raises demand for convenient dining. A record number of U.S. households traveled 50 or more miles by car during the Fourth of July weekend, trips that helped lift spending at restaurants and bars by 1.4 percent last month. This improvement allowed the segments’ monthly sales volume to eclipse the $90 billion threshold for the first time on record, with spending up an impressive 11.9 percent year-over-year. The standout performance bodes well for restaurant and bar-related space demand at a time when subsector vacancy rests in the high-3 percent range, the lowest rate since late 2018.