The shrink in February followed an impressive increase in January, when sales rose by a revised 3.2%, according to the Census Bureau data. The retail sales slowdown last month follows months of continued inflationary pressures on consumers.
“Overall, while advance monthly retail sales in February 2023 decreased slightly compared to January, the results are still promising considering all of the noise surrounding the retail consumer in the U.S.,” says Retail Leader Pro Chief Analyst Elizabeth Lafontaine. “January outperformed many expectations due to increased demand post-holiday, so February indicates more of a return to form across the industry.
“According to Circana, general merchandise demand for February lags behind last year, indicating that consumers are certainly re-evaluating their current and upcoming retail purchases,” she added.
While the U.S. is not technically in an economic recession, consumers are feeling the pressure of inflation and other economic variables, like high interest rates. As Retail Leader Pro recently reported, for retailers, responding to consumer perception is key.