Retail market: July's flat sales miss expectations

U.S. retail sales in July barely missed expectations and remained flat as consumers focused on online shopping and building and garden supplies.

Retail and food services were flat at 0.0% month over month in July, according to U.S. Census Bureau data released Aug. 17. Economists expected a 0.1% increase, according to consensus estimates compiled by Econoday.

Sales increased the most at nonstore retailers and building material and garden equipment and supplies dealers.

"While consumers continue to spend, they are prioritizing essentials and looking for the best deal," said Chip West, retail and consumer behavior expert at marketing company Vericast.

Retail sales

U.S. retail and food services sales had a preliminary estimate of $682.8 billion in July from a revised $682.6 billion in June, according to seasonally adjusted Census Bureau data.

Nonstore retailers posted a 2.7% month-over-month increase in July, while sales at building material and garden equipment and supplies dealers rose 1.5% month over month. Sales at electronics and appliance stores took the biggest hit, dropping 9.9% from the year-ago period.

Default signals

Internet and direct marketing retail had the highest median market signal one-year probability of default of all sectors at 7.8% as of Aug. 15, according to S&P Global Market Intelligence data. The scores, which represent the odds of default within a year, are based mainly on the volatility of share prices for public companies and account for country- and industry-related risks.

The median probability of default score for all publicly traded retailers as of Aug. 15 was 3.9%.

Bankruptcies

There have been eight retail bankruptcy filings in 2022 as of Aug. 16, according to Market Intelligence data, the lowest number of filings for the same period in at least 12 years.