People spend more on furniture, clothes, restaurants and bars

Wednesday, September 16, 2020

Updated at 9:03 am ET

US shoppers spent more prudently in August and retail sales rose 0.6% compared to July, when tens of millions of unemployed people stopped receiving additional federal unemployment benefits and families faced a confusing start to school.

Still, retail sales continued to grow, now for the fourth month in a row, with people spending more in restaurants and bars and buying more furniture, electronics, cars and clothing. And for the first time in months, online stores have not seen any growth.

After a near collapse in the spring due to the coronavirus pandemic, spending in stores and restaurants was above last year’s levels since June. August sales were 2.6% compared to a year earlier, the Ministry of Commerce said wednesday.

Retailers had been preparing for when the toughened unemployment checks would stop arriving after July. That money was seen as a major force behind the summer’s big increase in retail spending, which includes gasoline, cars, food and drink. More … than 29 million people still receive unemployment benefits and job growth has slowed down regularly since the beginning of summer.

Back-to-school expenses – generally the second shopping period after the winter holidays – started slowly. Families spent more on electronics and office furniture, but avoided their usual frenzy on backpacks and school supplies, as many students virtually returned to class.

Here’s where people were spending in August, compared to a month earlier:

  • Restaurants and bars: + 4.7%
  • Clothing and accessories stores: + 2.9%
  • Furniture stores: + 2.1%
  • DIY and gardening stores: + 2%
  • Electronics stores: + 0.8%
  • Service stations: + 0.4%
  • Online shops: unchanged
  • Grocery stores: -1.6%
  • Department stores: -2.3%
  • Big box stores: -0.4%
  • Sports, music and other leisure stores: -5.7%

Online shopping has become gangbusters, but this growth appears to be moderating. In August, 27% of shoppers said they felt more comfortable shopping in physical stores than in July, according to a recent survey by Adobe Digital Insights.

“As online shopping continues to dominate, we are now seeing a slowdown in growth as more people return to shopping in physical stores and consumers reduce their online spending in certain categories, such as clothes, ”wrote the group’s Vivek Pandya.

Copyright 2020 NPR. To learn more, visit https://www.npr.org.

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