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. With Interesting point about retail-sales data
BusinessWeek‘s Michael Mandel has written several pieces highly pessimistic about consumer resilience. This week he assesses retail sales data, up 1.3% in the first quarter even after gas stations and fuel dealers are removed from the figures. (Earlier Murketing post musing on this topic here.) “Nothing,” he writes, seems to stop the U.S. consumer from spending.”
Then he makes an interesting point, something I didn’t know: Online sales from U.S.-based e-commerce sites made to foreign consumers count as part of U.S. retail sales.”
How big a deal is this? Well, e-commerce sales accounted for “roughly 36% of the increase in nonenergy retail sales” in Q1, he says. But there is apparently no data on how much of that came from abroad. Mandel offers anecdotal evidence from Blue Nile, an online jewelry seller: its sales are up 3.8% over last year and “all of that gain came from Internet sales customers outside the U.S.”
I doubt there’s enough of this sort of thing going on to cause a significant difference in overall retail sales, not enough at least to explain why consumer spending hasn’t collapsed — not yet at least — to the degree Mandel’s earlier writings have suggested they will. But he makes a good point: It would be better to have the details on this information, especially given that a weak dollar and other factors are likely to increase overseas sales.
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Reader Comments
pure anecdote, but – down in NYC for the Fourth of July weekend, the place was just lousy with European tourists groaning under bag after bag of [luxury-for-us-bargain-for-them] consumer goods. Of course, more obvious because no Americans go to NYC for the Fourth, and a quarter of the city leaves, but, still – very noticeable, confirmed via similar anecdote with every person I talked to who’d been in a retail outlet there, recently.
Yes, more details are needed, but anecdotes like jkd’s above are increasingly common. The influx of foreign buyers taking advantage of the soft dollar could explain in part why sales are up. Price hikes could also explain why retail revenue is up. What I would like to see if how retail profitability is doing compared to a year ago.
This is a good point, I agree. I definitely hear this a lot about NYC these days, and I assume it’s true to a less extent in other big cities. Hard to say how much impact, but there must be some. Interesting.