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May Retail Numbers Bolster NRF Confidence

Photo by Lucrezia Carnelos

Retail sales remained at elevated levels in May despite month-to-month fluctuations that masked near-record performance, the National Retail Federation said.

“While May retail sales were down slightly, largely due to supply chain constraints, the more accurate indicator remains in the year-over-year data which, as the NRF calculates, showed growth of over 17%,” NRF President and CEO Matthew Shay said. “For the first five months of this year, retail sales are already tracking 17.6% above the same five months of 2020, giving us further confidence in our newly revised sales forecast of growth between 10.5% and 13.5% to more than $4.44 trillion for 2021. While there are downside risks related to labor shortages, supply chain bottlenecks, tax increases and over-regulation, overall, households are healthier, and consumers are demonstrating their ability and willingness to spend. We are confident.”

“Month-over-month comparisons and percentages of change simply don’t tell the story,” NRF Chief Economist Jack Kleinhenz said. “We are at a highly elevated level of spending, with dollar amounts in recent months some of the highest we’ve ever seen. Long-term trends in the number of dollars spent tell much more about the continuing economic recovery than whether sales were up or down from month to month. Retail sales as calculated by NRF were the second highest on record in May, topped only by holiday spending in December. Demand has continued to be strong even as the concentrated impact from government stimulus has faded. There is still pent-up demand for retail goods and consumers are likely to remain on a growth path into the summer.”

The U.S. Census Bureau today said overall retail sales in May were down 1.3% seasonally adjusted from April but up 28.1% year-over-year. That compares with increases of 0.9% month-over-month and 53.4% year-over-year in April. The year-over-year increases for both April and May were unusually high because most stores were closed by the pandemic during those months last year. Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, according to Census data.

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed May was down 1.2% seasonally adjusted from April but up 17.3% unadjusted year-over-year. That compared with a month-over-month decline of 0.6% and a year-over-year increase of 30.9% in April. NRF’s numbers were up 22.3%unadjusted year-over-year on a three-month moving average.

Unadjusted May sales as calculated by NRF totaled $388.6 billion, the second-highest level of spending on record, outpaced only by $414.7 billion in December.

Today’s numbers come less than a week after NRF revised its 2021 annual retail sales forecast. Sales this year are now expected to increase between 10.5% and 13.5% over 2020 to between $4.44 trillion and $4.56 trillion. Online and other non-store sales, which are included in the total, are expected to increase between 18% and 23% to between $1.09 trillion and $1.13 trillion. As NRF’s monthly calculation, the forecast excludes auto dealers, gas stations and restaurants.

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