Declining vehicle sales and the tumbling price of gasoline weighed on May retail sales, which sank 0.3%, the weakest in 16 months, according to data released by the U.S. Department of Commerce on Wednesday.
Retail sales accounted for $473.8 billion in May.
Sales at auto dealers decelerated 0.2% last month, and the industry is concerned that vehicle sales will not match last year’s record sales total of 17.6 million.
During the month, gasoline prices slipped 6.4%, according to Consumer Price Index data. What’s good news for consumers is not good news for merchants. Sales of gas declined 2.4%, the biggest drop in more than a year.
Retail sales were unchanged when not including auto sales and the price of gasoline.
The fast-growing e-commerce segment surged 0.8%. Physical store sales slid, with miscellaneous store retailers falling 1.3% and department stores down 1%, the worst showing of the year. Pressure on physical stores is manifesting itself in store closings this year at retailers including Gymboree, Macy’s, Sears and J.C. Penney.
May sales followed strength in April when sales rose 0.4%, a performance abetted by a late Easter holiday and the arrival of tax refunds.
Despite the sales decline in May, retail sales continue to increase moderately as the economy steadily grows. Sales have risen 3.9% in the first five months of the year, compared with the same period a year ago.