May data shows no signs of consumer spending slowing: Industry Overview

Research evidence excerpt

May data shows no signs of consumer spending slowing: Industry Overview

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Retail, Apparel and Consumer Products

May data shows no signs of consumer

spending slowing

Industry Overview

Retail spending increased 6% YoY in May 12 June 2026

BAC aggregated credit and debit card data indicates May retail spending increased 6% High Yield Credit

year-over-year, accelerating from 5% growth in April. Elevated federal tax refunds United States

continued to provide a tailwind. According to IRS data, the average tax refund increased Retail and Apparel

12% year-over-year through May 8. We expect retail spending to moderate going

forward as the tailwind of refunds dissipates and (1) inflation and (2) constrained

consumer budgets become larger challenges.

Pet store stabilization

Pet store spending was flat year-over-year in May, a deceleration from the 2% increase

in April. The category has both secular headwinds and tailwinds. Headwinds include (1)

increased competition from online and mass channels and (2) a shift towards smaller

William M. Reuter

dogs and cats, which consume less than larger dogs. Tailwinds include (1) delayed Research Analyst

marriages; (2) lower human birth rates; and (3) higher interest in pet adoptions as BofAS

+1 646 855 6363

indicated by Google trends data. We expect Petco benefits from these trends and margin william.m.reuter@bofa.com

improvement opportunities, supporting our Overweight rating. Michael DeRienzo

Research Analyst

Tax returns benefit clothing BofAS+1 646 855 7973

Clothing spending increased 5% year-over-year in May, a slight acceleration from the michael.derienzo@bofa.com

4% increase in April. The strong month is primarily reflective of federal tax refunds. We