Retail sales show modest increase as gas and food prices eat into disposable income
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Shoppers appeared to be more cautious last month in spending for clothing and other items as rising gas and food prices took up a bigger chunk of their disposable income.
Major retail chains reported a modest 4.9% gain in sales in May compared with the same month a year ago, missing analyst predictions of a more robust 5.4% increase, according to Thomson Reuter’s tally of 24 retailers.
“Overall, the numbers were strong on the surface,” said Michael Niemira, chief economist at the International Council of Shopping Centers. “However, we are seeing some inflation issues with prices of gasoline and rising food costs, which seem to have rippled through and affected middle to lower-end retailers.”
Discounters and off-price retailers performed well in May as consumers continued to hunt for bargains and deals. Sales at Costco Wholesale Corp. rose 13%, and others posted more modest increases. Ross Stores Inc. rose 4%, Target Corp. gained 2.8% and TJX Co., parent company of T.J. Maxx stores, grew 2%.
High-end stores posted stronger results in May, buoyed by a recovering stock market and rising global demand. Nordstrom Inc. saw a 7.4% bump and Saks Inc. posted a 20.2% increase.
Results are based on sales at stores open at least a year, known as same-store sales, considered a key measure of a retailer’s health.
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