The August retail sales report from the U.S. Census Bureau showed that retail sales accelerated less-then-expected from July. Moreover, July retail sales excluding autos and gas growth remained firmer-then-expected with both readings neither lining up with foot traffic or company commentary. And so, we hold the figures with a greater level of suspicion.
The trend for retail sales excluding autos, gas, mass, and food improved by 70 basis points to +4.1% growth, which was more in-line with our expectations. In our view, the improvement stems from back-to-school (i.e., a strong seasonal event) and the lapse of the transitory factors that depressed July. It also reflects a significant lift from pureplay e-commerce (“nonstore” retail according to the Census Bureau) and which is namely Amazon. Nonstore retail sales accelerated to +7.8% growth in August from +5.7% in July and represented a dominant portion of the retail sales excluding autos, gas, mass, and food at 38%. In other words, Amazon and other nonstore retailers have especially messaging savings and lower prices than before to consumers; as such, perhaps they picked up more back-to-school and back-to-college wallet-share this season than last; with that added market share giving the +210 basis points bump to nonstore retail’s August growth.
