"US Retail Inventory Also Ample Amid Strong Consumer Spending"...Positive Outlook for Year-End Shopping Season

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Despite concerns about inflation, American consumers are still opening their wallets wide, raising expectations that the year-end shopping season will also perform well.

The Wall Street Journal (WSJ) reported on the 16th (local time) that despite rising prices amid supply chain disruptions, consumer spending remains strong, and major retailers like Walmart are smoothly increasing their inventories. WSJ added that the analysis suggesting that concerns about weak sales during the shopping season are exaggerated is gaining traction.

The U.S. Department of Commerce announced that October retail sales increased by 1.7% compared to the previous month, exceeding the expert forecast of a 1.4% increase, continuing a three-month consecutive growth trend.

The increase in retail sales in October was the largest in seven months since March.

Core retail sales, excluding automobiles, gasoline, and groceries, rose by 1.4% last month.

WSJ reported that as the continuous increase in retail sales is confirmed, many experts are revising upward their fourth-quarter Gross Domestic Product (GDP) forecasts. It also introduced that large retailers like Walmart are raising their expectations for the year-end shopping season.

Walmart stated that it increased its U.S. inventory by 11.5% in the third quarter, expanding inventory in anticipation of strong sales during the year-end peak season.

Walmart also noted that sales at stores open for more than a year, which can be compared to last year's performance, increased by 9.2% in the third quarter, indicating that consumers are returning to normal spending behaviors after the impact of COVID-19.

Additionally, Walmart announced third-quarter results that exceeded expert expectations, with sales of $140.5 billion (approximately 166 trillion KRW) and adjusted earnings per share (EPS) of $1.45.

FactSet's compiled expert forecasts were sales of $135.43 billion and adjusted EPS of $1.40.

However, net income decreased to $3.11 billion (approximately 3.68 trillion KRW), or $1.11 per share, compared to last year due to increased costs.

Home Depot, a home goods retailer, also recorded third-quarter sales of $36.82 billion (approximately 43.5 trillion KRW), a 9.8% increase from the same period last year, significantly surpassing Wall Street expectations.

WSJ analyzed that large retailers like Walmart and Home Depot are relatively less affected by supply chain disruptions because they operate their own transportation networks and have advantages as large-volume shippers.

It also observed that consumers may try to fulfill the shopping desires they suppressed last year due to COVID-19, predicting that this year's Christmas will "never be gloomy" for retailers.

This content was produced with the assistance of AI translation services.