U.S. retail sales in August were up 0.6% compared to July, showing continued consumer spending despite lingering fears of recession. Average transaction value was up 1.4% for August, while traffic was down 2.4% for the month compared to last year. Back-to-school shopping and robust apparel sales drove more shoppers to the mall in August. Lifestyle centers and outlets had better traffic trends than enclosed malls, according to data from RetailNext.
Retail sales favorable to last year
Retail sales for the fiscal year were up 4.6% (minus autos and gas) compared to last year, while the Consumer Price Index (CPI) rose 3.7% for the 12 months ending August. Apparel and accessories store sales (slightly outpaced inflation, up 3.6% for the month) compared to the CPI for apparel, up 3.1%. August year-over-year sales favored restaurants and bars, up 9.1% as more consumers spent time traveling and socializing. The CPI for restaurant purchases is up 6.5% for the year. Other categories that did well in August were discount stores and warehouse clubs, up 4%.
Consumer spending trend: cats, wellness and Halloween
“Cat fever is sweeping the retail world, with sales of feline-focused supplies and accessories rising. Shopify’s latest shopping trends data reveals cat litter saw an increase of 286%, and cat beds were up 270.1% based on year over year sales for August from U.S. Shopify merchants,” stated a Shopify spokesperson. While pandemic puppies were all the rage during lockdown, cats are having their moment. Over 2 million cats are being adopted yearly, according to the World Animal Foundation. There are 46.5 million households that own a cat in the U.S.
Consumers continue to turn to massage therapy for relaxation, stress release, and pain management. The massage therapy services market reached $54.6 billion in 2022 and is estimated to grow at a compounded annual rate of 8.6% from 2022 to 2032. The increasing awareness of the importance of mental health will keep the demand for these services strong. Additionally, the rise of social media and influencers emphasizing mental health will continue to draw more consumers down the wellness path. Massage table sales increased 93.1% month over month from July to August 2023, based on the latest Shopify data.
“Costumes are taking center stage, as our Shopify shopping trends data shows a drastic increase of nearly 80% in sales from July to August. As the demand for self-expression and creativity soars, retailers are embracing the opportunity to help customers unleash their imagination and make a statement,” said a Shopify spokesperson. Predictions for the most popular Halloween costumes this year include Queen Charlotte (from Queen Charlotte: A Bridgerton Story), Ariel (from The Little Mermaid), and Barbie (from the Barbie movie).
Taylor Swift’s concerts give local economies a boost
Local economies benefited when Taylor Swift came to town. The Eras Tour, which took place multiple nights in some cities, gave retail businesses a much-needed boost, and on average, store traffic increased by 7% across the tour cities as analyzed by RetailNext. Traffic increases lead to ancillary enterprises benefiting from more shoppers. Philadelphia had its strongest month for hotel revenue in May due to the influx of guests for the Taylor Swift concerts, reported the Federal Reserve.
Shoppers came out in full force in Nashville and Pittsburgh to support Taylor, who was born in Pennsylvania and started her career in Tennessee. On and around concert days, Nashville store traffic jumped 15%, and Pittsburgh saw a 10% increase compared to last year. “Taylor Swift is a force, and the impact her concerts had on retail businesses does not go unnoticed,” says Joe Shasteen, global manager of advanced analytics at RetailNext. “We anticipate the pop in retail foot traffic will continue as her tour expands overseas, and we’ll monitor those traffic trends.”
Out of the retailers that use the RetailNext platform in each city of the tour, data shows a boost in traffic across apparel stores, with shoppers going out in full force, particularly in Nashville, which saw a 37% increase in traffic, Santa Clara with a 29% increase, Atlanta with an 11% increase, and Pittsburgh with a 10% increase. However, Taylor Swift concert traffic will not help in the U.S. for the holiday season since the final show in the nation this year was in early August. Hopefully, the boosts to U.S. local economies will continue for the cities on next year’s tour.
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