Overall retail sales in April were up 0.9% seasonally adjusted from March and up 8.2% year over year, according to data released by the US Census Bureau. That compared with increases of 1.4% month over month and 7.3% year over year in March.

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed April was up 0.9% seasonally adjusted from March and up 6.4% unadjusted year over year. In March, sales were up 1% month over month and up 3.9% year over year.

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NRF’s numbers were up 7.1% unadjusted year over year on a three-month moving average as of April.

April sales were up in two-thirds of categories on both a monthly and yearly basis, with year-over-year gains led by online sales and clothing and grocery stores.

Clothing and clothing accessory stores were up 0.8% month over month seasonally adjusted and up 11.2% unadjusted year over year.

Sporting goods stores were down 0.5% month over month seasonally adjusted and down 3.1% unadjusted year over year. Online and other non-store sales increased 2.1% month over month seasonally adjusted and by 11.3% unadjusted year over year.

“April retail sales demonstrate consumer strength and willingness to spend despite persistent inflation, supply chain constraints, market volatility and global unrest,” NRF president and CEO Matthew Shay says.

“While consumers are facing higher prices, they are preserving their budgets by shopping smart. Retail businesses are also facing increased costs like higher energy bills and rents as well as the cost for goods, transportation and wages. Despite already tight margins, retailers remain committed to their customers and are doing everything they can to absorb these costs to keep products affordable. With the Federal Reserve already raising interest rates, the Biden administration and Congress have an opportunity to provide targeted relief to US households by lifting the China tariffs, passing legislation to fix the supply chain and addressing immigration reform to ease the tight labour market.”

NRF chief economist, Jack Kleinhenz, adds: “April’s retail sales data is encouraging because it shows consumers are taking higher prices in stride and remain resilient. Sales benefited from Easter/Passover spending and also from tax refunds, which have been delayed by pandemic-related issues at the IRS but are also larger than usual. High gasoline prices, rising interest rates, and price pressures across the board continue to be headwinds to spending, but wage and job gains are offsetting that with a tailwind that should bode well for moderate-but-steady spending growth going forward.”

A difficult period for retail

Neil Saunders, managing director of GlobalData, notes despite pressures from the rising cost of living, consumers remained resilient in April and continued to spend at an elevated pace.

“Total retail sales increased by 8.7% over the prior year. They were also up by 68% and 34.3% on the same periods in 2020 and 2019, respectively. Such dramatic uplifts underline the fact that the pandemic boom has not yet ended, even if its impact is fading. Inflation in the form of elevated prices, contributed to higher spending, especially in areas like gasoline. Once inflation is taken out of the mix, underlying volume growth is significantly lower, and in some categories, has turned negative. This suggests that the hefty increase in the cost of living has not been without consequence for consumers.”

Saunders adds the worrying thing is that the impact of inflation and the fallout for retail is not immediate; it builds over time.

“Most households are still in the phase of being able to cope with the price increases that have come through to date. However, if inflation remains elevated over the balance of this year, the effects will become much more pronounced, and we could see retail volumes deteriorate further. There are also some worrying initial signs that consumer confidence is starting to fade with sales at big-ticket retailers like automotive, home improvement, and electronics chains posting negative growth, and others like furniture virtually flat over the prior year. With inflation present in all these areas, it suggests volumes are very negative. Of course, some of this is related to the winding-down of pandemic demand and some is also a consequence of shortages from supply chain issues. However, these factors do not account for all the moderation which shows consumer sentiment about the economy is also weighing on buying decisions.”

But not all sectors have fared badly: “Sales at apparel stores rose by 11.2% over the prior year, well above the prevailing rate of inflation for the category. A lot of this appears to be driven by consumers preparing their wardrobes for spring and summer, including the anticipation of travel and vacations. Some of it is also latent demand from March, which was a poor month for clothing.”

Saunders concludes that based on the latest results, GlobalData maintains its view that we are entering a more difficult period for retail.

“However, we are also of the opinion that the landing looks to be a relatively soft one, at least in demand terms. The greater challenge for retailers will be to balance reduced volumes with their own higher costs. This means most of the pain will show up in retail margins and profitability rather than on the top line.”