UNITED STATES – CIRCA 1960s: Tired ,frustrated woman in supermarket shopping trolley.
On May 15, the Census Bureau released results for April retail sales. These numbers are often useful since they help tell the story about what items and categories consumers are spending on vs. where they are penny pinching. They also convey real-time monthly information related to what consumers prize on the budgetary front. Factors to bear in mind for April as results unfold included the continued potential for tariffs and uncertainty around inflation. Consumers also continue to pay off their holiday spending hangovers, and two major spend events, Easter and spring break occurred toward the second half of the month.
Let’s take a look.
Total sales eked up to $724.1 billion from $723.7 billion the previous month. Neil Saunders, managing director of GlobalData, summed the overall sentiment up succinctly, “Despite all the chatter, there has not been a significant deterioration in [consumers’ willingness to spend]; this may come later in the year if economic conditions deteriorate, but it is not yet present to any large degree.”
Chip West, a consumer expert and commentator with RRD, concurred, “Consumers appeared to show caution, waiting to see how the picture involving trade and supply chains played out,” he wrote in an update. “Despite economic volatility and supply chain concerns, consumer purchasing power held firm–bolstered by easing inflation, low unemployment, and steady income growth.”
When we drill down into the report released by the Census Bureau, we get a better sense of monthly changes in consumer spend by category. In April, nine of 13 categories were flat-to-down. Food services and drinking places were the biggest winners in the month, rising to $99.093 billion from $97.930 billion. “Consumers were motivated by the various deals and special offers conveyed by restaurants,” wrote Saunders. “There is an even greater fight for ‘share of stomach’ today.”
Pleasant weather might have also been at play when motivated consumers hit certain shops. Other winners included building materials and garden supplies, which ticked up to $41.363 billion from $41.031 billion, and furniture and home furnishings, which were slightly up at $11.553 billion from $11.519 billion.
Non-store retailers remained a big winner this time around, rising to $123.539 billion from $123.321 billion a month prior. This group is often a strong (if not the strongest) performer each month, and includes sales through catalogs, infomercials, and vending machines, according to the Census Bureau.
Although restaurants did well, food and beverage stores were flat, declining to $84.383 billion from $84.384 billion, with grocery stores, a subcategory, also declining to $75.890 billion from $75.959 billion. Health and personal care declined to $38.873 billion from $38.949 billion, and general merchandise fell to $76.993 billion from $77.118 billion. Department stores, another subcategory, fell slightly to $3.252 billion from $3.297 billion.
Remarking about groceries and pricing, West noted the 12-month inflation rate was at 2.3%, “its lowest since 2021, which helped the category.” Egg prices, which have been a hot-button headline stealer for some time now, are, “still up 49% from last year, [but] they dropped 13% in April,” West added.
Consumers put off car related expenses in April as well. Motor vehicle parts and dealers slipped some to $141.625 billion from $141.826 billion. Gasoline stations also fell to $51.050 billion from $51.319 billion. Meanwhile, clothing and accessories fell to $25.837 billion from $25.948 billion.
May numbers are expected to drop on June 17 before the markets open. With summer just around the corner, tariffs looking as though they’ll be on pause for a moment or longer, and plenty of potential spend events ahead, one observation to look out for is whether or not consumers have pulled back significantly enough in May to make a dent. “Actual impact of tariffs on prices and products has not yet hit the shopper,” Saunders cautioned, adding that the effect rings more like it’s depressing consumer confidence. “Something that is worrying, but is more nebulous in terms of influence on spending,” he wrote.
NB: Unless otherwise indicated, dollar amounts in this article are adjusted for seasonal variation and for holiday and trading day differences, but not for price changes.
