U.S. Retail Sales Slide 0.3% In May, The Biggest Drop In 16 Months
Americans cut spending at gas stations, department stores and electronics shops in May as retail sales registered their biggest drop in 16 months, a cautionary sign for the economy. The Commerce Department said Wednesday that retail sales dropped 0.3%, the first decline since February and the sharpest since a 1% decrease in January 2016. Economists had expected sales to increase slightly in May after rising 0.4% in April. Last month, furniture and home furnishings stores were up 0.4% from April. Clothing and clothing accessories stores saw a bump of 0.3%. Sales fell 2.8% at electronics stores, the biggest such drop since March 2016. They fell 2.4% at gasoline stations and 1% at department stores, which have struggled with competition from online retailers, especially over millennial shoppers. “I think big-box [stores] are going to continue to struggle until they reinvent themselves,” said Ron Friedman, a partner and co-head of retail and consumer products at accounting and advisory firm Marcum. Shopping areas will increasingly need to bring in eateries to attract customers, who might then find it convenient to browse through the stores after a meal, he said. “I think the idea of just getting in the car and going shopping may not happen as much,” Friedman said. The retail industry’s cyclical nature makes month-over-month comparisons less meaningful, said Paula Rosenblum, co-founder and managing partner at Retail Systems Research. Read more at The Los Angeles Times.
