Retail sales growth slowed again in April compared to recent months, dragged down by a drop in department and apparel specialty store performance.
The U.S. Census Bureau’s advance monthly report released earlier today indicates that total retail sales reached almost $475 billion last month, a 4.5% increase over April 2016’s $454.7 billion, but virtually flat compared to last month.
On a 12-month smoothed basis, retail sales rose by 4.1%, their smallest increase in eight months.
Department, chain and discount stores saw their sales drop by 4.1% year over year, to $12.6 billion. On a 12-month smoothed basis, sales fell by 2.1%, their smallest drop since December 2015. Within the big-store category, performance at discounters like Walmart outpaced that of department stores such as Macy’s and national chains including JC Penney.
Sales at clothing and accessories specialty stores were virtually unchanged compared to April 2016, but decreased on a 12-month smoothed basis, according to revised figures.
Sales of the combined department, chain, discount and specialty sectors, where most of the traditional retail apparel business is done, fell by 1.2% to almost $34 billion.
Even more troubling than the decline in these channels’ sales is the steady growth of inventory since last fall which, coupled with the wave of store closures expected during 2017, could put tremendous pressure on sales and earnings in the current fiscal year.
Sales in the non-store retail sector, which includes pure-play e-commerce, increased by 12% in April to $51.4 billion, the thirteenth straight month of double-digit increases. In April, Amazon reported first-quarter sales and earnings that beat analyst expectations, an indication that the e-commerce leader is gaining share from traditional retailers at a faster-than-expected rate.