Retail spending is up, as reported by the Guardian, and rose 12 percent in May over the previous month. While this would appear to signal that retailers as a whole are doing well, Larry Elliott, the Guardian’s economics editor, points to a small but important distinction. Retail spending denotes the purchase of goods, either in person or online, and makes up a third of consumer spending, a larger category that includes services, such as hospitality. Some experts speculate shoppers may be foregoing services and focusing on products, such as investing in weights with money saved from a cancelled gym membership.
What signal is the latest data sending?
Why do we bring this up? As we see it, a bump in the retail market suggests a number of things:
- While there is less money circulating, shoppers have not sealed off their wallets
- Consumer preferences have shifted towards a buying experience with limited in-person contact, which was to be expected
On June 15, a greater share of non-essential brick-and-mortar stores were permitted to reopen. Opening, however, doesn’t guarantee success, and a survey of retailers indicates they are