Core retail sales, which exclude petrol stations, auto dealers, and building material stores, rose 1 per cent in February following a downwardly revised 1 per cent decline in January. These figures align with expectations of a 1.9 per cent annualised increase in consumer spending for Q1, contributing to a projected 1 per cent rise in real GDP.
Department store sales plunged 1.7 per cent, the largest percentage decline in nearly a year, as consumers become more cautious and price conscious. Department store sales are down 7.5 per cent over the past 12 months.
US retail and food service sales rose 0.2 per cent in February, below the expected 0.6 per cent, with department store sales plunging 1.7 per cent.
Consumers, including high-income households, are shifting towards value, boosting general merchandise and online sales.
Core retail sales rose 1 per cent.
Economic uncertainty and market declines are weighing on consumer confidence.
General merchandise stores sales rose 0.2 per cent, which includes discounters, as households, even those that make over $100K, gravitate toward value. Online sales recovered in February, rising 2.4 per cent, after falling by the same amount in February, another sign that department stores could face a difficult environment in 2025, KPMG said in a press release.
Recent confidence data indicate a sharp decline in sentiment across income levels. While financial strain among lower-income consumers has been evident, there are growing concerns that higher-income consumers may also be reducing their spending.
The US equity market, a consistent source of wealth for upper income households, entered correction territory last week, falling 10 per cent from its recent peak. Tariff uncertainty and concern about the outlook for the US economy is weighing on consumers.
Sales at gasoline stations dropped 1.0 per cent, with a 0.9 per cent decline in gasoline prices almost fully accounting for the decline.
Fibre2Fashion News Desk (SG)
