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Despite consumers’ abrupt loss of confidence in the U.S. economy’s future (see “Consumer Sentiment Tanks,” Trends Journal, 17 August 2021), Lowe’s, Target, and Walmart all raised their sales outlook for the rest of the year after earnings topped expectations in this year’s second quarter.
Overall retail sales dipped 1.1 percent in July compared to June, but the weakness was due largely to fewer auto sales, according to the Financial Times.
Walmart reported strong sales of clothing, party supplies, and travel-related gear; Halloween-related merchandise flew off the shelves at Home Depot and swimsuits were big sellers at Target, the FT reported.
Target and Walmart also reported an increase in foot traffic in their stores, confounding predictions of ever-shrinking numbers of in-person shoppers.
“We continue to see a very optimistic shopper, certainly shopping with caution and they’re wearing masks more, but we’re seeing tremendous resilience in the consumer today,” Target CEO Brian Cornell said in comments quoted by the FT.
Spending on children and back-to-school supplies was boosted by the new federal $300-per-child tax credit, the FT found.
In states starting school early, parents receiving the credits spent 22 percent more on school supplies than in 2019, according to a study by Earnest Insights, while parents not receiving the credits spent 1 percent less.
Restaurant sales have been sliding since mid-July, the FT said.
Visits to booking website OpenTable slipped 12.3 percent and to competitor Resy 10.9 percent from 10 July through 7 August, a survey by Similarweb found, but data did not show whether the drop was due to COVID fears, people traveling, or eating more during summer at places not requiring reservations.
Travel businesses have been crimped somewhat by the Delta variant’s spread.
The Disney Co. reported some cancellations at its theme parks but reservations remain “really strong,” Disney CEO Robert Chapek told analysts in comments quoted by the FT.
TREND FORECAST: Retail sales will rotate from down to moderately up as the Christmas season approaches. However, materials shortages and supply chain glitches will drive up prices and should the media and politicians continue their non-stop spread of Delta Fear and Hysteria, the brick and mortar retail sector will again decline as online sales grow.
And as evidenced by the firms that are growing, once again, the Bigs are getting bigger while Mom and Pop’s decline.
In fact, as we have reported, only 47.1 percent of U.S. businesses employ 500 or less employees, while the bigs employ the majority of the plantation workers of Slavelandia.
Retail sales will sour in a serious way when the U.S. Federal Reserve curtails its $120-billion monthly bond-buying program and raises interest rates. That will begin the stock market’s slide back to reality and startle consumers into being more thrifty for an extended period.