woman jacket shopping

Delta Variant Weighs on Retail Sales

Retail Sales Fall in July

Retail sales declined in July, which fueled concerns about economic recovery for investors. Spending at US retailers fell 1.1% last month compared to levels in June.

This is a reversal from earlier in the summer when sales at retailers were surging and consumers flush with extra cash and a desire to spend went shopping in droves. Now, worries about more pandemic shutdowns and restrictions are weighing on consumer sentiment, which declined sharply in the beginning of August. Vehicle sales showed the most significant drop. Consumers also spent less on clothing, furniture, and sporting goods in July.

Walmart Isn’t Feeling the Impact…Yet

Walmart (WMT), the nation’s biggest retailer, has not felt the impact of rising COVID-19 cases so far. The company said it is seeing an increase in the number of customers wearing masks in stores but its foot traffic remains high as back-to-school shopping season kicks into gear. What’s more, the retailer has not seen any panic buying among consumers. This was common during the early days of the pandemic and caused shortages of toilet paper and other household goods.

For its second quarter, Walmart’s comparable sales in the US rose 5.2% while ecommerce sales increased 6%. Though Walmart did see climbing sales during the period, its growth rate in the quarter was slower than earlier in the year.

Home Depot’s Growth Slows

Home Depot (HD) also reported growth in sales during its second quarter, but that growth was slower than what the company experienced last summer during the pandemic-induced DIY boom. The retailer said demand remains strong among consumers but supply-chain issues and increasing material prices are weighing on growth. Comparable sales in the second quarter were up 4.5%. In the previous four quarters, comparable sales grew by over 20%. Business at Home Depot has remained steady in the first two weeks of August but it is not clear if that trend will continue.

Investors face significant uncertainty when it comes to the retail industry, but they will get more information soon in the form of earnings reports from other large retailers. Lowe’s (LOW) and TJX Cos. (TJX) (the parent company of TJ Maxx) are scheduled to report today, and Ross Stores (ROST) will publish results tomorrow. It will be interesting to see how the Delta variant of COVID-19 impacts their prospects.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender