Consumer fundamentals prevailed over record inflation
By Alan Wolf, YSN
Soaring prices should theoretically constrain consumer purchases, particularly the kind of big-ticket items that BrandSource dealers sell.
But as of last month, historically high inflation still hadn’t deflected retail sales of appliances, home furnishings and consumer technology.
That’s the takeaway from the U.S. Census Bureau, whose latest monthly retail sales estimates show a year-over-year bump in February sell-through for BrandSource members’ core categories.
Furniture and home furnishings stores led the charge with some $10.7 billion in sales last month, representing a 7.4 percent increase from last year and a 1 percent decline from January 2022.
On the appliance and electronics front, dealers generated $6.4 billion in sales in February, up 2.6 percent from the prior year and essentially flat from January.
By comparison, total retail sales, excluding gas stations, restaurants and car-related purchases, rose 16 percent year-over-year in February and were flat from January, while online-only retailers were down nearly 4 percent from January but up almost 14 percent from February 2021.
Despite the rising cost of fuel, food and other commodities, retail sales should remain strong through the balance of the year, according to the National Retail Federation (NRF), with total annual growth pegged at 6 to 8 percent.
“Most households have never experienced anything like this level of inflation, and it is expected to remain elevated well into 2023,” acknowledged Jack Kleinhenz, chief economist for the retail trade association. “In addition to inflation, the forces impacting the economy include COVID-19, international tensions and policy variability.”
Nevertheless, consumer fundamentals remain in place, he said, citing healthy household finances and strong job and wage growth, which should support solid growth for consumer spending through December.