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Retail Sales Pick Up in July as Department Stores Show Signs of Life

Retail sales growth picked up in July compared to recent months, helped by strength in e-commerce and by a slight recovery in department store sales.

The U.S. Census Bureau’s advance monthly report released this week indicates that total retail sales reached nearly $478.9 billion last month, a 4.2% increase over July 2016’s $459.4 billion, and a 0.6% increase over June 2017.

On a 12-month smoothed basis, retail sales rose by 3.8%, their biggest increase in three months.

Department, chain and discount stores saw their sales drop by 3 percent year over year, to $12.6 billion. On a 12-month smoothed basis, sales rose by 0.15% which, though very small, was the first positive showing since March 2015.

Sales at clothing and accessories specialty stores increased by 1.5% compared to the year-ago period, to $21.7 billion, and increased 4.9% on a 12-month smoothed basis.

Sales of the combined department, chain, discount and specialty sectors, where most of the traditional retail apparel business is done, fell negligibly to $34.3 billion.

Despite all the store closures that have already occurred and that are expected to continue in 2017, inventory in department and specialty stores seems to be under control, with the inventory to sales ratio actually declining slightly in the latest month.

Sales in the non-store retail sector, which includes pure-play e-commerce, increased by a staggering 11.5% in July to $52.7 billion, capping 16 straight months of double-digit increases, further indication that Amazon and other e-commerce players are gaining share from traditional retailers at an accelerating pace.