Americans cut back on their spending last month as a surge in COVID-19 cases kept people away from stores.
Retail sales fell a seasonal adjusted 1.1% in July from the month before, the U.S. Commerce Department said Tuesday. It was a much larger drop than the 0.3% decline Wall Street analysts had expected.
The report offers the first solid glimpse of how the spread of the delta variant of COVID-19 may have changed the spending habits of Americans. At the end of July, the U.S. Centers for Disease Control and Prevention began recommending that even vaccinated people start wearing masks indoors in public places.
According to Tuesday's report, spending fell at stores that sell clothing, furniture and sporting goods. At restaurant and bars, spending still rose nearly 2%, but the rate of growth has slowed from recent months before the delta variant spread and people were feeling safer about dining without their masks with others.
Economists think Americans are also shifting their spending from goods to services, things like haircuts or vacations, which are not included in Tuesday’s report. And rising prices for everything from food to washing machines may have checked spending.
Major retailers are releasing quarterly financial results this week, offering more insight into behavior during yet another uptick in infections. On Tuesday, Walmart raised its sales outlook for the year, a sign it expects Americans to keep on shopping at the same pace.
But the Commerce Department reported Tuesday that even online sales have begun to slow, falling 3.1% from the month before. Companies have reported a slowdown after astronomical growth last year as people stayed home and shopped more online during the pandemic.
Ebay, for example, said its number of active shoppers slipped 2% to 159 million in its latest quarter. UPS said it's shipping fewer packages in the U.S. And Amazon, the world's largest online retailer, said online sales grew 13% in its most recent quarter, the company’s smallest quarterly online sales growth in two years.
Netflix is set to report its Q4 earnings after the bell on Thursday. Wall Street is bullish on the streaming giant, estimating it will report its highest total of new subscribers for any quarter in 2021. But the company also faced major hurdles last year, from slowing revenue growth to rising streaming competition to increasing production costs. Chris Legg, senior managing director at Progress Partners, gives a preview.
PepsiCo and Beyond Meat are partnering together to launch a plant-based jerky. This is the first in a series of plant-based foods the pair will roll out together.
M&M's is rebranding its iconic chocolate candy characters with new looks and storylines highlighting the "progressive world" we live in today. Jane Hwang, global vice president of M&M's, joined Cheddar to talk about the company's rebrand. "M&M's is on a mission to create a world where everyone feels they belong," she said. The multi-colored, anthropomorphized candies will be getting an updated look and tone, according to Hwang, such as Green receiving a makeover that reflects more female empowerment and confidence.
From delays in delivery during the pandemic to a not-so-positive cameo to "And Just Like That" on HBO Max, Peloton may be spinning its way out of the spotlight. The at-home fitness company stock plummeted following insiders selling $500 million worth of its stock leading up to the sharp decline. Andrew Boone, director and equity research analyst at JMP Securities, talked to Cheddar about why he isn't feeling too concerned about the sell-off, calling Peloton a "best in class product."
After announcing a subscription price increase, Netflix will be releasing its Q4 earnings later on Thursday. Tuna Amobi, director and senior equity analyst at CFRA Research, spoke with Cheddar's Baker Machado to discuss what investors can look forward to from the streaming giant. “It’s really a very, very watershed, I might add, report for Netflix, ”Amobi said about the much-anticipated announcement.
