June Retail Sales Miss Expectations
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Excluding autos and gas, sales grew 0.4%.
Economists expected sales to grow 0.6% over last month and by 0.5% excluding autos and gas.
In May, retail sales grew 0.3% and excluding autos and gas, sales were flat.
This report is a huge barometer for how things are going for the U.S. consumer after we heard some less than encouraging commentary from retailers last week.
Last week, Container Store CEO Kip Tindell said that, "Consistent with so many of our fellow retailers, we are experiencing a retail 'funk.'" Tindell added that, "While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014 - so we're not alone in this."
Later in the week, hardwood flooring retailer Lumber Liquidators said that the customer demand it experienced in mid-March didn't carry into May, with June weakening further.
Family Dollar also reported disappointing quarterly earnings, as same store sales fell 1.8% at the discount retailer. Family Dollar CEO Howard Levine said, "Our results continue to reflect the economic challenges facing our core customer and an intense competitive environment."
And then last Thursday, Gap reported June same store sales that fell 2%.
In this week's Monday Scouting Report, BI's Sam Ro highlighted comments from Wells Fargo's John Silvia ahead of the report. "Vehicle sales continued to strengthen in the month, which should apply upward pressure to retail sales," said Silvia. "Gains are likely to be broad-based as well. Chain store sales posted a relatively large gain in June, and consumer confidence has reached its highest level in more than six years. Consumer prices also made solid gains in the month, which should push the headline number higher."
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