After the gasoline index fell 7.7% in the month of July, consumers continued their shopping habits, despite rising prices at retailers and grocers.
U.S. Retail And Food Service Sales: According to the U.S. Census Bureau, retail and food service sales for the month of July remained unchanged at $682.6 billion from the previous month, although it is still 10.3% higher than in July 2021.
With back-to-school season in full swing, nonstore retailers or online shopping is up 20.2% from last year. However, many retailers struggled in the first quarter, as they were overstocked on the incorrect inventories as consumers sought priorities over wants.
Doug McMillion, President and CEO of Walmart, said in the latest quarterly report, “We’re pleased to see more customers choosing Walmart during this inflationary period, and we’re working hard to support them as they prioritize their spending. The actions we’ve taken to improve inventory levels in the U.S., along with a heavier mix of sales in grocery put pressure on profit margin for Q2 and our outlook for the year”.
Similar to Walmart, Target and Best Buy both saw weak sales in the first quarter as consumer spending started to shift, but has yet to slow down.
Retail sales are important because they provide key insights on consumer spending, which drives a large part of our economy.
In the latest Federal Reserve minutes, Fed officials agreed to raise interest rates until the economy slows and inflation shows signs of deceleration.
“Some participants indicated that, once the policy rate had reached a sufficiently restrictive level, it likely would be appropriate to maintain that level for some time to ensure that inflation was firmly on a path back to 2 percent,” the minutes said.
Retail And Food Service Stocks To Watch: As the state of market and economy remain in flux, here is a list of retailers to keep an eye on for the second half of 2022.
- Walmart Inc WMT
- Target Corporation TGT
- Amazon.com Inc AMZN
- Best Buy Co Inc BBY
- Yum Brands Inc YUM
If inflationary and supply-chain pressures continue to worsen, retailers such as Target may find it more difficult to turn sales on high-profit margin products as consumers become more conscientious.
Image and article originally from www.benzinga.com. Read the original article here.