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Retail This Week: Strong Headline Sales, Shaky Foundations
A hot September sales number, a cautious holiday outlook, and fresh cuts at the country’s biggest grocer defined the week.
Sales beat forecasts, but gas did the heavy lifting
US retail sales rose 0.8% in September, topping economists’ consensus by 0.5 percentage points. The details are less cheerful. Excluding gas stations, sales rose just 0.2%. Analysts also flagged fading momentum: the three-month annualized growth rate is running at 2.4%, a loss of steam heading into the holidays.
Inflation is part of the story. Wholesale prices jumped in September to their highest level in over four years, the second hotter-than-expected inflation reading of the week. One analysis argued that after adjusting for price changes, the volume of retail sales actually fell 0.1% in the month the headline beat.
Holiday forecasts stay upbeat, with caveats
The National Retail Federation expects holiday sales growth to accelerate to 4.2% this year, betting consumers stay resilient. The same Reuters report noted that Walmart, Kohl’s and American Eagle have all flagged pressure on consumer spending.
Deloitte’s survey adds texture. Average household holiday spending could rise 4% to $1,654, driven by Gen Z and millennial shoppers, with retail spending up 10% while spending on holiday activities falls 4%. Economists also say inflation inflates the forecast. Another report noted that higher prices account for about half of the anticipated growth, and higher-income shoppers fuel much of the spending.
Kroger cuts corporate jobs
Kroger revealed plans to eliminate roughly 3,000 corporate positions over the next three years. The company says the changes will let it invest more in store employees and lower prices for customers. The move follows a year of closures, as the chain shutters around 60 underperforming stores by the end of 2026.
