Retail Minute: Q1’s sales growth deceleration foreshadows rest of year
I’m Elizabeth Lafontaine, chief retail analyst here at Retail Leader Pro, and welcome to this week’s Retail Minute.
The U.S. Census Bureau recently released its retail numbers for March, rounding out the retail performance for the first quarter of 2023. The story here is that retail sales for March were only up 1.5% compared to last year across the industry. This is compared to growth of 6% in January and 4% in February. The deceleration of sales growth throughout the quarter I believe is a prime indicator of what may be to come for the retail industry for the remainder of 2023.
These numbers also don’t factor in inflation, and since we know average sales prices are up, it’s probably an indicator that unit demand is down in some sectors. The slow growth supports the notion that unease amongst consumers and focus on other discretionary categories are chipping away at sales.
We anticipated a slow down across the industry in 2023 and while sales began strong due to easier comps against the omicron variant last year, the quarter ended closer to expectations.
The industry needs to brace itself for softening sales this year, and focus instead on gaining market share with consumers by offering value, convenience and experience at retail.
Thanks for tuning in, and be sure to check out more retail stories on Retail Leader.