US retail sales in August were stronger than expected. But resilient American shoppers are still looking for deals wherever they can find them, with a weakening labor market and tariff-related inflation fears still swirling.
Retail sales in August rose 0.6%, more than the 0.2% increase that was expected by Wall Street economists. In the key back-to-school shopping month, sales at electronics and appliance stores increased 0.3%.
Sales growth in clothing and clothing accessories, as well as sporting goods, hobby, musical instrument, and book stores was even better, rising 1% and 0.8%, respectively. At nonstore retailers, which includes e-commerce, sales rose 2%.
In an interview with Yahoo Finance on Wednesday, Best Buy (BBY) CEO Corie Barry said that while its business continues to point to a “steady” consumer, shoppers remain on the lookout for deals.
“We see almost everyone looking for value now,” Barry said. “We actually are seeing a consumer … bifurcated a bit, [that’s] still willing to spend if they really feel like it’s a great value.”
At Best Buy, same-store sales growth was up low single digits in late August. Barry said it is “continuing to see that strength, especially through back-to-school.”
With more discretionary purchases, rather than household essentials, Barry said the company is seeing customers still willing to pay up for new products, like the Nintendo Switch 2 or Apple’s updated lineup of iPhones, AirPods, and Apple Watches unveiled last week.
“We can summarize new technology better than anyone,” Barry said. “And so we’re super excited about those things.”
And while Barry said Best Buy continues to see consumers remaining “choiceful,” the company doesn’t see the kinds of broad shifts in consumer habits that have been called out by retailers that represent different parts of the household budget.
Other retailers, like Walmart (WMT) and some dollar stores, for instance, have said that high-income shoppers are driving share gains, with wealthier consumers “trading down” to lower-priced outlets to stretch their dollars further.
Dollar General (DG) CEO Todd Vasos told investors earlier this month that consumers are “seeking value, we’re seeing that in all cohorts of customers, meaning our core customer, mid- and high-end customers, [are] all seeking value at this point.”
And even with the Federal Reserve set to cut interest rates this week and ease the debt burden for consumers in the months ahead, experts expect more cost-conscious shopping habits to stick around.
