May Retail Sales Offer Positives for Multiple Holdings — and Especially One

The consumer and related spending is a strong driver of the domestic economy — and consumers continued to open their wallets in May and more than the market expected.

Headline Retail Sales for May rose 6.9% year over year, a noticeable jump compared to the 4.8% figure for April and well above the trailing three-month average of 5.3%. Focusing on retail-only sales, we see a 7.5% figure for May, up from 5.1% in April and 5.7% for the trailing three-month period. Those figures of total spending dollars support recent comments from American Express (AXP) that member spending in the current quarter is better than it was in Q1 2026.

When you examine the data below, you’ll quickly see one of the reasons for the sequential jump in spending—gasoline sales — which likely means two things.

First, they spent more on gas and less on other categories. Second, they spent more overall, given the move to push through price increases in the last few monthly PMI reports. There is also a step up in the PPI and CPI data over the last several months.

But here’s the thing: While the headline figures will mathematically be a positive for Q2 2026 GDP, including the rolling GDPNow forecast from the Atlanta Fed, the underbelly of the report isn’t quite as bullish as the headlines make it out to be. Remember, the personal savings rate in April fell to 2.6% compared to 5.8% in April 2026. Next week brings the May figure, and while gas prices have moved lower, consumers are still contending with inflation pressures.

Understanding all that, we remain bullish on the shares of TJX Companies (TJX) as well as Amazon (AMZN), Costco (COST), and American Express. Reviewing the above chart, March-May spending on clothing and general merchandise remained robust, as did non-store shopping, better known as digital shopping. Looking at the trailing three-month non-store figure of 11.3% vs. 5.7% for total retail-only spending, we’d say our thinking that consumers would pivot to that shopping modality to combat inflation pressures was spot on. We see that confirmation as very nice support for our AMZN shares.

Meanwhile, it wouldn’t be a review of a monthly Retail Sales report if we didn’t compare its findings against Costco’s monthly sales report. In doing that, once again, we see confirmation that Costco continues to take consumer wallet share:

Costco’s May US comp sales, which include the impact of gas and foreign exchange, climbed 13.7% year over year vs. the May Retail Sales figure of 7.5%, which also includes the impact of gas sales. Costco’s digital sales soared 21.1% in May vs. the 12.2% figure for non-store sales.

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At the time of publication, TheStreet Pro Portfolio was long AMZN, AXP, COST, and TJX.