Promising signs: Despite Nordstrom and other retailers’ reservations about the latter half of the year, there are a number of reasons to believe the holidays may not be so bleak.
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Retail sales continue to rise. Excluding gas and motor vehicle and parts sales, July retail sales grew 0.7% month-over-month (MoM), although the figures don’t account for price increases.
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Gas prices are falling. The national average for a gallon of regular gas has dropped every single day since soaring to a record high of $5.02 per gallon on June 14, per AAA. The national average for regular gas dipped on Wednesday to $3.88 a gallon, down from $4.38 a month ago.
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Consumer confidence is rising, according to both the University of Michigan’s consumer survey and the Morning Consult/Axios Inequality Index. Notably, each component that makes up the University of Michigan survey’s economic expectations index improved—particularly among low- and middle-income consumers for whom inflation is particularly salient.
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The global supply chain is in its best position in several years as multiple metrics that gauge both the time and cost of transporting items have recently moved in a promising direction.
The big takeaway: There’s no question that the need to clear excess inventory will weigh down retailers like Nordstrom and Macy’s in the latter half of the year. But there’s plenty of reason for optimism: Nordstrom reported that its total sales rose 12% YoY in Q2, which shows that there are still plenty of consumers who are willing and eager to spend. And many economic indicators are pointing in a promising direction.
Yet after the abrupt slowdown in retail sales earlier this year, it makes sense for merchants to adopt a posture that allows them to underpromise and overdeliver.
Go further: For more on The Era of Uncertainty, read our report here.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.