Retail Continues To Suffer As Sales Decline For Second Month In A Row

Image courtesy of Joachim Rayos

For the first time in nearly two years, retail sales declined two months in a row, highlighting once again the current challenges facing a retail industry that has suffered a number of bankruptcies and store closures so far in 2017.

Sales in March decreased 0.2% at U.S. stores, restaurants, and online retailers from their level in February, according to figures [PDF] released by the Commerce Department on Friday.

In all, the Bureau estimated advanced monthly sales of $470.8 billion for March, a decrease of about $1 billion from February’s sales of $471.8 billion.

The largest decrease in sales came in the auto retail sector, with dealers and parts companies lowering sales 1.2% from $96 billion in sales in February to $95 billion in March.

The food services and drinking places also saw a decrease of 0.2% (or about $300 million) from February to March.

Not all aspects of retail suffered for the month, however. The report shows that building material retailers and health and personal care stores — such as pharmacies — saw increases in sales.

Additionally, despite the announced closures of department store retailers such as Macy’s, JCPenney, and Sears, sales at these types of stores rose in March from $12.57 billion to $12.59 billion.

These increases could be related to consumers’ desire to shop at stores holding sales prior to closing. Just yesterday, JCPenney announced it would postpone the closing of 138 stores after the locations saw an increase in recent sales.

Despite the overall decrease from Feb. 2017, the figures reflect a 5.2% increase over March 2016 levels.

Of course, the figures are an estimate and could be revised in the future. That was the case for Feb. 2017 sales, which the Department revised Friday from a decrease of 0.1% to 0.3%.

The sales decreases are concerning for analysts, as retail sales are used as an impression measure of consumer spending, reports the Wall Street Journal.

Additionally, the decreases seem to be in contrast with recently released consumer sentiment measurements. In fact, the WSJ reports that The University of Michigan’s consumer sentiment measure found on Thursday that sentiment was the highest it has been in more than a decade.

Analysts tell the WSJ that something will change, whether it’s an increase in spending or a decrease in confidence.

The faltering sales figures come a week after the Labor Department’s Bureau of Labor Statistics released data that found for the second month in a row a significant employment loss in the retail sector.

Between the 29,700 decrease in March and a drop of 34,700 in February, nearly 65,000 retail jobs have been lost.