THE REALITY OF RETAIL: CONSUMER SPENDING IS UP
It’s a fact: People are spending more time, well…spending. According to Kiplinger, retail sales, with the exception of cars and gasoline, bounced back significantly in March of 2019, making February’s decline just a blip in the rear view mirror.
Motor vehicles sales jumped 3.1% and food service saw its best gain in eight months, while sales also spiked in furniture and clothing. Sales of electronics and sporting goods still languished and remain at levels below last year’s sales at the same time.
One of the consumer categories that continues to defy explanation: Restaurant sales peaked in July of 2018, declined in December, and have been climbing ever since with a particularly large gain in March. All in all, the growth in restaurant sales continues to be quite a bit below that of 2018’s 6.1%.
Consumer confidence tends to surge when the stock market makes major gains, which suggests that 2019 retail sales (again, excluding cars and gas) should continue to show steady, substantial growth of 4%.
It’s expected that e-commerce sales will continue to easily lead the way in increases, rising significantly and probably reaching 11%, which would be the 10th straight year of double-digit growth. Owing to increased consumer confidence, in-store sales will also increase but only by about 2%.
Retail & e-Commerce
Brick-and-mortar and e-Commerce continue to battle for consumers’ attention and dollars, and 2019 will be no exception. Although 94% of all retail sales still occur in stores, e-commerce has changed the landscape in terms of how, and where, consumers spend their retail dollars. The most important drivers for consumers who choose online shopping include 24/7 access, being able to easily find exactly what they’re looking for, expediency, and convenience. Footfall in retail stores is declining by 15% annually.
The good news is that confidence in the economy is leading to increased consumer spending — regardless of whether that means time spent at the keyboard or at the local mall.