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Retail Sales June 2021 | Retail Sales Flatten as Shoppers Rely Less on Government Stimulus

June 16, 2021 by Marcus & Millichap Research Services

Consumer spending well ahead of pre-pandemic level. Although core retail sales dipped 0.8 percent from April to May, expenditures are 15.7 percent above the February 2020 level as stimulus funds and amplified unemployment benefits flooded the economy with additional capital. Monthly gains are anticipated to be modest this year as further direct cash payments are unlikely. Only one more bill can be passed through the Senate with the reconciliation process, and resistance to additional large spending legislation is gaining momentum. Rising inflationary concerns are giving some legislators on Capitol Hill pause. Core inflation jumped 3.8 percent last month, the largest gain in more than three decades. The producer price index, mean-while, soared 6.6 percent on an annual basis. Collectively, the sharp rise in prices will prompt more caution among budget hawks.

Tailwinds for retail real estate gain momentum. As of mid-June, nearly all states have lifted the restrictions that most negatively impact brick-and-mortar retail stores. California and New York, two of the largest states by population, withdrew nearly all restrictions associated with COVID-19 as nationwide case positivity rates fell to the lowest levels since the beginning of the pandemic. Barring the emergence of a variant that skirts existing vaccinations, retailers that have struggled with capacity restrictions should benefit in the coming months. Restaurants, in particular, are already seeing an increase in traffic, posting a 1.6 percent rise in sales last month relative to February of 2020.

Utilization of  services cuts into consumer spending. While it may take some time for Americans to get acclimated to normal life following lockdowns that lasted approximately 15 months, retail sales are already beginning to stabilize on a monthly basis. Furthermore, more people are using services, which are not reflected in the Census Bureau’s advanced estimate. For example, “A Quiet Place Part II” recently surpassed $100 million in domestic box office receipts, the first movie to break that threshold since the onset of the health crisis. Visits to gyms, meanwhile, were only 23 percent lower than pre-pandemic levels at the end of May.

15.7%

0.8%

Gain in Core Retail Sales Since Feb. 2020 Monthly Decrease in Core Retail Sales in May 2021

Sources: Marcus & Millichap Research Services; Bureau of Labor Statistics, Federal Reserve; Placer.ai; Transportation Security Administration; U.S. Census, Bureau

 

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Filed Under: Research Brief, Retail Tagged With: #retailsales #retail

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This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2020 Marcus & Millichap and Limon Net Lease Group

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