'Weak' Retail Sales? Someone Forgot to Tell Shoppers

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shoppers in a mall
"Catastrophe!" "Disaster!" "Mayhem in the Mall!" These aren't (quite) the actual headlines that mainstream media outlets typed up to describe recent retail sales statistics, but they pretty much capture the mood.

In the pages of The Wall Street Journal, for example, we saw a Technicolor depiction displaying the rise and fall (mostly fall) of American retailers:
  • Car sales: down 0.6% in June.
  • Electronics and appliances: down 0.8%.
  • Sporting goods, books, and hobbies: down, down, and downer -- 1.6%.
  • And incredibly in a vacation season, gasoline sales: down 1.8%.
In fact, about the only sector of the retail economy that showed any improvement at all was the ambiguously named "nonstore" category (read: tax-free purchases from Amazon.com (AMZN) and its Internet cohorts). Those were up 0.5%, as shoppers swarmed online in search of bargains. But is it really as bad as it sounds? Have Americans stopped shopping? Have the terrorists finally won?

Not necessarily, no.

You see, it's really all a matter of perspective. The Journal, and the rest of the mainstream press, focused last week primarily on the comparisons between June sales figures and those of May. And to an extent, that makes sense, because it fits nicely into the story of a three-month trend of sequential sales slippage. (And incidentally, works well with reporters prognosticating on how short-term trends in the economy might affect results in the upcoming election).

Lost in the obsession with short-term navel-gazing, though, is a little-noticed fact that the Journal noted in passing, but gave little ink to: When you compare retail sales trends today to what they looked like one year ago -- what folks in the investment industry refer to as year-over-year comparisons -- things aren't looking grim at all. In some cases, in fact, they look downright fantastic.

Trees, Meet Forest

Take a look for a moment at how sales results for June 2012 compare to June 2011's numbers, and compare them to the more headline-grabbing, short-term numbers noted above. See if you can spot the difference:
  • Car sales: up 7.3% in 2012.
  • Electronics and appliances: down 1% (so no, it's not all wine and roses...).
  • Sporting goods, books, and hobbies: up 4.4%.
  • And gas? Up only 0.1% -- which when you look at it from a car owner's perspective, isn't bad news at all.
And that's not all. June building and garden supplies, indicative of the health of the housing market, are up a modest 0.6% over 2011 levels. Restaurant and bar receipts have risen 6.3%. And in confirmation of a truly long-term economic trend, that murky "nonstore" category, which, as we've seen, refers to Internet sales, is positively jumping, up a whopping 10.9% compared to June of last year.

Viewed in this light, things actually don't look half bad for the economy. Yes, in the short term, we do appear to be seeing some weakness in retail sales over the past few months. But maybe that shouldn't surprise us. There's a lot of uncertainty in the economy right now, not least the question of who's going to be sitting in the White House a year from now, whether he'll be picking up the tab for our health care, and how much he'll be picking our pockets to pay for it.

In just a few short months, American shoppers will head to the polls to vote on whether they feel they are, or are not, better off now than they were four years ago. One thing's for certain, though: If you look at the numbers correctly, retail numbers are certainly better today than they were one year ago.

The headlines notwithstanding.


Motley Fool contributor Rich Smith holds no position in any company mentioned. But last month, he did buy a new SUV, boosting U.S. automotive sales figures and goosing gasoline retail receipts in one fell swoop. The Motley Fool owns shares of Amazon.com and Motley Fool newsletter services have recommended buying shares of Amazon.com.

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46 Comments

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joey

Yes rates are at all time low's ..Retail stores all say 50 to 70% off......No **** it's better .. What dumb ass crap frpm motley FOOOOOOOOOOLS....Stopping kissing NOBAM'S ASS....GONE 2012....And hoping no one will take any advise from motley ass holes...U will only lose YOUR MONEY......Stay away...

July 24 2012 at 9:30 PM Report abuse +1 rate up rate down Reply
opw1

The best gauge of which way the economy is going is "how packed are the beach towns" . OC MD was a ghost town on the 4th of July. This year was especially grim when you could drive the multi mile stretch of shops at the speed limit or more. It should be bumper to bumper in normal capitalist times. This economy is socialist toast until somebody loses his job in Nov along with all the other "progressive leaders" who want everything now and refuse to plan for the future.

July 24 2012 at 5:29 PM Report abuse rate up rate down Reply
1 reply to opw1's comment
chris1011

Republicans 2012: Keeping millions of men, women and Veterans out of work to put one man out of a job.

July 26 2012 at 1:47 PM Report abuse rate up rate down Reply
scottvtm

yes, Things are going fine in the private sector. Whats all this nonsense abut the economy?

Thanks for clearing that up. For a moment I thought the economy was in terrible shape and Obama would be kicked out of office in Noovember.

July 24 2012 at 5:08 PM Report abuse rate up rate down Reply
craigmrfrn

Who the hell wants to even go out of the house? We have been baking in the 90's to the 100's here for the last 45 days.

July 24 2012 at 2:50 PM Report abuse +1 rate up rate down Reply
recap444562

Necessity is driving most purchases. It has been my experience many businesses are taking huge mark -downs to move inventory. I have also observed that replacement parts for appliances, autos etc. are extremely expensive and often of poor quality coming from either China or Mexico. Most large item purchases (appliances etc.) are imported and of much less quality than a generation ago. All this due to unions driving manufacturing out of this country. Nothing says to me that business is enjoying any real recovery. We have an economy which remains in sever recession with no end in sight unless there is a change in DC in November. You do not need a degree in economics just pay attention when you are out in your own communities. Nothing reveals truth better than personal observation.

July 24 2012 at 2:25 PM Report abuse rate up rate down Reply
Iselin007

The damage is done so you will have to stop throwing the bull few are buying it.

July 24 2012 at 1:30 PM Report abuse rate up rate down Reply
ADI AND JANET

I am in retail and I have been amazed with the increase in sales month to month and year to year. I serve a upper income customer and they are spending without hesitation. Doesn't add up to me either!

July 24 2012 at 11:38 AM Report abuse rate up rate down Reply
1 reply to ADI AND JANET's comment
Iselin007

You serve an upper income customer an that is supposed to be convincing?

July 24 2012 at 1:37 PM Report abuse rate up rate down Reply
tsmomfla

Most people I know, family & friends & co-workers are saving the money they used to spend on shopping and buying exactly what they need....my whole extended included. Because the economy is so volatile, you never know. And the savings are going into credit union savings. I do miss my mall days though. When I shop t is not in a mall.

July 24 2012 at 11:30 AM Report abuse +1 rate up rate down Reply
Love my 409

Thanks for the article AOL, we have a business that supplies restaurants and our business is up between 6-10% over last year. The restaurants we serve are buying more which means their customers are spending money. We would hear these stories on the news about the economy no rebounding and it just didn't add up to what we have been experiencing.

July 24 2012 at 11:18 AM Report abuse rate up rate down Reply
jdwlor

I live in a small town and we have just about every kind of restaurant there is, from family to fast food and I can say that I don't understand if everything is so dismal it surely don't look that way at lunch or evening. If the ones that write these stories would stop down gradeing the economy and start looking to the brighter side it would and could have a different effect.

July 24 2012 at 10:38 AM Report abuse rate up rate down Reply