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09 19 2013

09 19 2013

Retail Sales Numbers Show Slow Growth

Retail growth has shown improvements over the last few months, although numbers have not been consistent. According to the U.S. Commerce Department, retail sales increased in July, however, the growth was far from significant. The department reported a 0.2 percent increase in retail sales in July from the month prior, expanding at a slower rate than was initially projected.

Economists expected a more rapid increase during the month, although some sectors, such as those that do not include cars, gasoline, and building materials increased by 0.5 percent, the largest gain in seven months. Department store sales also increased by 0.6 percent in July, a positive sign for large businesses.

Small businesses, however, do not benefit from these increases, making it difficult for many owners to stay in business. Compounding the slow sales rates are the steadily tight lending standards that have been in effect for years at large banks.

The Wal-Mart effect

Big-box stores are also suffering from lower than anticipated sales. In mid-August, Wal-Mart announced it did not expect to bring in high sales numbers, and that it would likely not make as much money in the second half of 2013 as it did in the first half of the year.

As the country’s largest retailer, this report sent the financial sector into a panic on the day of the announcement, bringing the Dow Jones industrial down by more than 225 points. The news left economists and retailers worried that lower sales at Wal-Mart would predict sluggish sales across other retailers both large and small.

Other large retailers such as J.C. Penney, which has been declining in sales for years as a result of the recession, have also experienced losses. The department store reported a $586 million loss in second quarter 2013, due largely to an ineffective store overhaul strategy.

If these sales are a sign of what is to come for entrepreneurs, many small retailers may find themselves in trouble. If a small business owner is having trouble making ends meet, they can come to National Funding for assistance. National Funding can help with getting a small business loan to expand business operations for retailers who need an extra boost, or can provide a merchant cash advance for business needs to allow a company to stay afloat.


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