Strip out gasoline, and retail sales fell 0.3% month-over-month in March, says James Knightley, chief international economist at ING Economics. On the positive side, there are signs of resilience within the data and in any case, spending was unlikely to keep pace with January’s post-Omicron surge.
What that means is that when you hear consumer spending rose, you should translate that to mean that higher gasoline prices led overall spending higher. Gasoline station sales accounted for 9.6% of all retail spending in March.
We expect this to play out in the bev/al sector with some downward shifting in what brands people buy — more Jim Beam, less Knob Creek, for instance — but no significant reduction in volume.