Loading the player...

What are 'Retail Sales'

Retail sales are an aggregated measure of the sales of retail goods over a stated time period, typically based on a data sampling that is extrapolated to model an entire country. Measuring consumer demand for finished goods, retail sales help gauge the pulse of an economy and its projected path toward expansion or contraction. As a leading macroeconomic indicator, healthy retail sales figures typically elicit positive movements in equity markets.

BREAKING DOWN 'Retail Sales'

In the United States, retail sales are a monthly economic indicator. The retail sales report, compiled and released by the Census Bureau and the Department of Commerce, covers the previous month, and is released about two weeks after the month-end. Comparisons are made against historical data; year-over-year comparisons are the most-reported metric because they account for the seasonality of consumer-based retail.

Behind the Retail Sales Report

The retail sales report captures in-store sales as well as catalog and other out-of-store sales. The report also breaks down sales figures into groups such as food and beverages, clothing and automobiles. The results are often presented two ways: with and without auto sales being counted, because their high sticker price can add extra volatility to the data.

Retail sales figures are vital to stock investors as a whole, and especially to those who directly invest in retail companies. they are also a big component of the total gross domestic product (GDP) in the United States, so any extended drop-offs in retail spending can trigger a recession by lowering tax receipts and forcing companies to reduce head counts.

As far as broad economic indicators go, the ail sales report is one of the timeliest, providing data that is only a few weeks old. Individual retail companies often give their own sales figures around the same time per month, and their stocks can be very volatile around this time as investors process the data.

Retail Sales and the U.S Economy

Known as a key leading economic indicator, retail sales reports reflect statistics culled from 5,000 retail outlets and food service entities. With consumer spending accounting for approximately two-thirds of GDP, retail sales are viewed as a major driver of the economic health of a nation.

May 2016 retail sales were about $455 billion. The figure represents a 0.5% increase from April 2016 and a 2.5% increase over May 2015 figures. The May 2016 results came in higher than economists’ forecasts of 0.3%. Subsequently, better-than-expected retail sales results have prompted an expectation that U.S GDP growth estimates may be raised from the 2.5% annual projection currently fostered by economists.

Online retail purchases grew 1.3% over April 2016. Largely based on the growing popularity of retailers such as Amazon.com, Inc., sales from the cyber-segment reflected a 12.2% increase over May 2015. By contrast, weakness in traditional department stores continued. Sales fell by 5.8% over May 2015 figures as companies such as Macy’s, Inc. continue to close locations in the wake of a declining number of shoppers.

RELATED TERMS
  1. Core Retail Sales

    U.S. aggregate retail sales excluding automobile and gasoline ...
  2. Chain Store Sales

    An indicator that provides information on the monthly sales volumes ...
  3. Gross Sales

    A measure of overall sales that isn't adjusted for customer discounts ...
  4. National Retail Federation - NRF

    A retail trade association with members from all phases of retail ...
  5. Comparable Store Sales

    The amount of revenue a retail location generated in the most ...
  6. Same-Store Sales

    A statistic used in retail industry analysis that compares the ...
Related Articles
  1. Insights

    What is the Retail Sales Report?

    The retail sales report is a measurement of the goods that retailers sell based on a sampling of different stores.
  2. Investing

    Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.
  3. Insights

    April Retail Sales Rise 1.3%, Beat Expectations

    April Retail Sales Report
  4. Insights

    U.K. Retail Sales Fall in February

    According to data released by the Office of National Statistics on Thursday, retail sales in the United Kingdom declined in February on low, weather related clothing demand.
  5. Insights

    U.S. Retail Sales Flat In July

    U.S. retail sales missed expectations in July putting a damper on growth and decreasing the chances of a rate hike.
  6. Investing

    Playing The Decline of Traditional Retailers (XRT, RTH)

    Play the decline of traditional retailers with a strategy that lowers built-in exposure to online sales.
  7. Investing

    Key Financial Ratios For The Retail Industry

    The retail industry is measured on sales growth in existing store, forecasted based on foot traffic and ticket data, and the impact on profitability ratios.
  8. Investing

    UK Retail Sales Surge Higher, Shrugging off Brexit Uncertainty

    The Office for National Statistics reported on Thursday that the U.K.’s retail sales show sharp growth in April, dismissing the apprehensions of the upcoming referendum on European Union Membership.
  9. Investing

    The 4 R's Of Investing In Retail

    In retail, successfully managing return on investment (ROI) and other financial indicators is the key to a healthy business.
  10. Investing

    Choosing The Winners In The Click-And-Mortar Game

    E-tailing has changed the way consumers do nearly everything. Do you know how to pick the best retailer?
RELATED FAQS
  1. What has the retail sector evolved to its current structure?

    Find out about the retail sector, the size of United States and global retail markets and why online retailers are changing ... Read Answer >>
  2. What countries represent the largest portion of the global retail sector?

    Learn about the five countries that dominate the global retail sector: Japan, Germany, the United Kingdom, China and the ... Read Answer >>
  3. What portion of the global economy is represented by the retail sector?

    Learn the size of the global retail sector and how fast e-commerce is catching up; find out how close China is to overtaking ... Read Answer >>
  4. Why is the strategy of 'always be closing' (ABC) popular in retail sales?

    Understand how the term ''always be closing'' is related to retail sales. Learn about the benefits and drawbacks of selling ... Read Answer >>
  5. How does the long-term outlook of the retail sector compare to the broader economy?

    Find out why the retail sector is primed for strong growth moving forward, especially online retail, and learn why it outperforms ... Read Answer >>
  6. What are the primary risks an investor should consider when investing in the retail ...

    Learn about the primary risks of investing in the retail sector, such as bad economic conditions, regulation, competition ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center