Archive for year: 2025

Inflation seems simple – just compare this year’s prices to the same time last year. In fact, it is more complex. The most important thing to remember is that it is cumulative so even when the YOY rate slows, it can cause a range of issues – selling less product and even a drop in revenue. One impact that is often ignored is slowed $ growth. That is the focus of this report. In order to give an accurate reading of the situation we will include charts for the Big Retail Groups and the “Advance” Relevant Retail Channels. We will also include separate charts for Monthly & Ytd data to better show trends.

First the Jan>Apr Monthly Report for Big Groups (100% of U.S. Retail $)

We also included the Y/E numbers for 2024, both actual & average, to show our goal – Beat these lifts!
There are 3 things that immediately stand out. One is expected – a BAD February. It is often the low point of the Retail year. In 2025, the lift vs 24 was -78% below avg for Relevant Retail, but Total and all other groups had drops. The big “surprise” is January. Gas Stations had their only monthly lift in 25. It was -42% below avg but all other groups had above avg lifts. A factor is that holiday spending has moved earlier. This encourages January spending. The final “stand out” is the big Mar>Apr lift in Auto. This is due to impending tariffs. People are buying now to avoid tarifflation’s high prices.

Restaurants – The February drop was small and the other 3 months had lifts above average. The lifts consistently increased reaching +6.9% in April, 23.4% above average. If they can continue their non-February performance, they will likely have a great year.

Auto – Their pattern is almost exactly the same as Restaurants but with lifts much more above average, especially in March & April. The Mar & Apr lifts were double the average. The 25% tariff was effective 4/3/25. Consumers saved thousands of dollars.

Gas Stations – They are truly in turmoil. Their only plus month was -42% below avg and all drops were bigger than 2024.

Relevant Retail – They do about 60% of Total Retail $ so it’s no surprise that they have a similar pattern. 1 big difference is that they were +1% in Feb – no drop. The Feb & Mar lifts were below avg while the Jan & Apr lifts were above. Their 23>24 lift was above Total Retail. In 25, only Feb & Apr were bigger. The chart clearly shows their Feb>Apr progress.

Total Retail – They had a drop in February, but March was basically equal to the average and Jan & Apr were slightly above average. All non-Feb months had lifts above the annual average and were 60+% more than the actual 3.0% lift in 2024. They are making progress but it is slow.

Summary: JAN: $↓: 0; ↑Avg: 4; ↓Avg: 1; FEB: $↓: 4; ↑Avg: 0; ↓Avg: 1; MAR: $↓: 1; ↑Avg: 2; ↓Avg 2; APR: $↓: 1; ↑Avg: 4; ↓Avg: 0

Now let’s take a closer look at Relevant Retail. We will report the same lift data for the 11 channels in our Advance Retail Sales report. They generate 98% of Relevant Retail $ so it is an accurate representation of this part of the Retail Market.

11 Relevant Retail Channels (98% of Ytd $)

Relevant Retail – Their +3.6% lift in 24 was -22.8% below average. No drops in 25. The lifts for February & March were below average but January & April were above average.

Furniture – No drops. Lifts were double the average in January, March and April. The big lifts in Mar>Apr were probably due to fear of skyrocketing prices from impending tariffs.

Electronics/Appliances – They have ongoing high deflation. $ Drops in both January & February. Sales turned positive in Mar>Apr but only the lift for March was above average.

Bldg Matl/Garden/Farm – They had the smallest of the 4 drops in 23>24, -0.6% but the 3rd biggest decrease in February, -6.1%. They had lifts in Jan, Mar & Apr but all were below average. This includes their normal Spring lift. The April increase was -56% below average. Cumulative 20% inflation was undoubtedly a factor.

Grocery – Sales were only +2% in 24, -36% below average but they surged in January to +5.1%, 63% above average. Growth slowed to less than 1% in Feb>Mar, over 70% below average. However, they had a strong rebound in April. Sales were +5.5% vs 24, 82% above average.

Health/Drug – Sales were +3.6% in 24, -31% below average. The lift grew slightly in Jan>Feb to 4+% but it was still about -20% below average. Sales surged in Mar>Apr to +8.8%, 73+% above average.

Clothing – They had a slow 24, +2.5%, -19% below average, but started 25 strong, +5.4%, 67% above average. Then sales fell -2.4% in February. In March the lift exceeded the average by 3% but they “took off” in April to +5.9%, more than double the average lift. Like Furniture, the big April lift was likely due to fear of impending tariffs.

Sport/Hobby/Book – They were -2.8% in 24. This trend continued in Jan>Feb, peaking at -6.4% in February. In March they turned slightly positive, +0.6% but this grew in April to +3.4%, 12% above average – a big turnaround.

Department Strs – It’s difficult to find something positive. They were -4.6% in 24 had drops Jan>Apr in 25. The biggest drop was -5.9% in February – no surprise. Sort of good news: 3 of drops were 60+% less than average.

Clubs/SupCtrs/Value/$ – They offer Brick ‘n Mortar value and the convenience of 1 stop shopping. They have had strong growth since their creation in the 80’s. COVID further accelerated growth so it is no surprise that all lifts are below avg. They even had a small -0.2% drop in February. Things slightly improved in March, +0.2%, then rose to +5.4% n April.

Miscellaneous – Pet Stores account for 15+% of this group’s sales. They had a -13% below average lift in February. All other measurements  were above average, and their lifts peaked at +8.1% in March. They have the best performance of any channel, even Furniture Stores, and they did it without the benefit of a pre-tarifflation buying surge.

Nonstore – 90% of $ are from internet/mail order (vast majority is internet). The Internet has had strong sales growth since its inception, but it skyrocketed due to COVID’s “stay at home” behavior. They have an average lift of about 10%. Their 24 lift was +8.1%. All lifts in 25 were below this and below average – no surprise. Low: Feb +5.0%; High: Mar +7.4%

SUMMARY

23>24 – Drops: 4; Below Avg Lifts: 6; Above Avg Lifts: 1

25 Jan – Drops: 3; Below Avg: 4; Above Avg: 4                 25 Feb – Drops: 6; Below Avg: 5; Above Avg: 0

25 Mar – Drops: 1; Below Avg: 5; Above Avg: 5               25 Apr – Drops: 1; Below Avg: 4; Above Avg: 6

In the above Summary, regarding Drops and Above Average lifts, green indicates the best and red is the worst. Obviously, the best month is April and the worst is February. However, the biggest positive change occurred in March. 5 channels with drops turned positive. 3 became below average and 2 above average. 3 with below average lifts moved up to above average. The classification of 3 was unchanged so 8 fueled the improvement. April was only a little better than March as 1 below average moved up. However, we should note that now more than half of the channels are above average. We also can’t forget January. There was only a slight improvement in the number of positive lifts vs Y/E 24, from 7 to 8 but the number with above average increases rose from 1 to 4 – a significant change. The situation has definitely improved since hitting bottom in February. The CPI is still low and impending tariffs have not had a significant negative impact.

Now let’s take a different view of the data from the Big Groups and the same 11 channels. Rather than monthly sales, we we look at Ytd numbers. We will still view them monthly so we can see any trends.

The Ytd numbers are arguably the most important. In December, they become Year-End, which is the most quoted and remembered data in any year. While the monthly data shows what’s happening in the marketplace right now, the Ytd data consolidates the data. This blending reduces the impact of sales spikes – positive or negative. This can be either good or bad. The impact of the big drop in February 25 was lessened by the widespread Above Average January lift. It can also work the other way. The big February drop is still reducing the positivity of strong lifts in March and April. We’ll begin our analysis with the Big Retail Groups.

The first thing that you notice is that the spending patterns for Restaurants and Relevant & Total Retail are virtually identical. All groups had January lifts and all but Gas Stations were Above Average. However, only Auto had Above Average lifts in either March or April. Also, only Gas Stations had any sales drops.

Restaurants – Sales for 24 were +5.2%, -7% below average. They flipped in January as the lift vs last year grew to +5.7%, 5.5% above average. The lift radically slowed in February to +2.4%, -57% below average. The situation steadily improved in March & April as the YOY increase grew to +4.6%, -18% below average.

Auto – Sales were +2.3% in 24, -47% below average and the worst “positive” performance of any group. They turned it around in January with a +5.8% lift, 32% above average. The lift dropped to +2.0% in February, -55.5% below average and the smallest lift of any positive big group. Thanks to pre-tarifflation buying the YOY lift took off in March & April, reaching +5.9% in April, 33% above average. As we said, they were the only Big Group with any Non-January above average lifts.

Gas Stations – Whether you look at the data monthly or Ytd, they are doing bad. The April Ytd sales drop of -3.5% is even worse than the -2.9% at Y/E 24. That does not bode well for 2025.

Relevant Retail – Except for January, +5.0%, they seem to be stuck in the 3% lift range. April Ytd, +3.9%, did finally exceed the +3.6% in 24. This is not a surprise as April had their only non-January above average monthly lift. They have made slow but steady progress since February.

Total Retail – The pattern matches Relevant Retail but the YOY changes for all but January are smaller. The averages are about the same so Total has bigger disparities. Total also includes Auto and Gas Stations which have had extreme lifts and drops. However, they are making steady progress since February and their Ytd lift has been above 24 since March.

Summary and Comparison of Monthly to Ytd

  Monthly: Drops: 6; Below Avg Lifts:  4; Above Avg Lifts: 10

         Ytd: Drops: 3; Below Avg Lifts: 11; Above Avg Lifts: 6

Mon: JAN: $↓: 0; ↓Avg: 1 ↑Avg: 4; FEB: $↓: 4; ↓Avg: 1 ↑Avg: 0; MAR: $↓: 1; ↓Avg 2 ↑Avg: 2; APR: $↓: 1; ↓Avg: 0; ↑Avg: 4

Ytd: JAN: $↓: 0; ↓Avg: 1 ↑Avg: 4; FEB: $↓: 1; ↓Avg: 4 ↑Avg: 0; MAR: $↓: 1; ↓Avg 3; ↑Avg: 1; APR: $↓: 1; ↓Avg: 3; ↑Avg: 1

Obviously, January  Monthly & Ytd are the same. The summary clearly shows that the Ytd report levels the Feb>Apr data. The situation doesn’t look good Ytd but both reports show that it is improving for all but Gas Stations.

Now, Let’s look at Ytd Sales for Key Relevant Retail Channels

The Ytd chart looks a little worse than the Monthly chart. It turns out that this is true. Both charts have the same number of Below Average lifts, 41% of all entries. However, the Ytd version has 27% more drops and -20% less Above Average lifts. Ytd also has 3 channels that had drops every month in 2025. Monthly has only 1. However, Ytd has 2 channels with Above Average lifts every month. Monthly has none. It’s a complex situation. Let’s get into the specifics.

Furniture Stores – They are going strong. Their huge January lift pushed the February Ytd lift from below to above avg. Now, all months are above average. Tarifflation fear caused binge buying in Mar>Apr so the current lift is double the avg.

Electronics/Appliance – Ytd they are all negative. This version hides Mar>Apr lifts. March was even 6.6% above average. The impact in the Ytd chart was that their YOY drop slowed from -5.0% in February to -1.9% in April.

Bldg Matl/Garden/Farm – Their big February drop turned March from a below average monthly lift to a -0.4% Ytd drop. Both charts show a slight improvement in April.

Grocery – Their big January lift made  their situation look significantly better in Ytd. However, it effectively hid the above average lift in April. Note: The current Ytd lift (+3.0%) is 50% above 24 Y/E and just 6% below the annual average.

Health – Both Monthly & Ytd have the same pattern – Jan>Feb, below average lifts; Mar>Apr, above avg. However, the Mar>Apr Ytd lifts are not as big as monthly – both actual and vs average.

Clothing – They had a +5.4% lift in January, 67% above avg. This eliminated the February drop in Ytd but the February drop changed Mar>Apr from above to below average in Ytd. April Ytd is 24% more than 24 & equal to the annual avg.

Sport/Hobby/Book – They had drops in Jan>Feb. Feb was -6.4%. This turned Ytd all negative. It also hid the possible start of a recovery. Mar>Apr both had monthly lifts. March was below avg but April was 12% above avg.

Department Strs – Both reports show drops every month. They have been fading for years. It continues.

Club/SupCtr/Value/$ – They offer value and convenience, the biggest shopping drivers. Some $ stores are struggling but SuperCenters are still going pretty strong. Besides the internet, one problem in sustaining strong growth is that they are running out of new customers. The Monthly report had a 0.2% drop in February and only a 0.2% lift in March. The Ytd numbers look better. There are no drops, but the April Ytd lift is only +2.7%, 68% below average.

Miscellaneous – This is probably our favorite channel because it includes pet stores. They also have great performance. In the Monthly report, the YOY lift for February was +3.6%, -13% below average. All other months are above average. The Ytd report is even better. All months are above average and April is +6.2%, 42% above average and 15% more than Y/E 24

Nonstore – They are driven by the internet which has had the strongest growth and became the biggest $ channel in 2020. The Monthly & Ytd reports have similar patterns – all months below avg. April Ytd is +6.1. That sounds great but it is -38% below average. We’re seeing that it is difficult, if not impossible to maintain double digit growth…forever.

Relevant Retail – Their $ come from a mixture of different spending patterns. They had no drops and both Monthly & Ytd show steady improvement since February. Ytd hides the Above avg April lift but it shows that the group’s performance in April now exceeds 2024…+3.9% to +3.6%. Here is a summary and comparison of Monthly to Ytd for the 11 channels.

                                                        Monthly: Drops: 11; Below Avg Lifts: 18; Above Avg Lifts: 15

                                                                 Ytd: Drops: 14; Below Avg Lifts: 18; Above Avg Lifts:  12

Mon: JA $↓: 3; ↓Avg: 4 ↑Avg: 4; FE $↓: 6; ↓Avg: 5 ↑Avg: 0; MR $↓: 1; ↓Avg 5 ↑Avg: 5; AP $↓: 1; ↓Avg: 4;↑Avg: 6

Ytd:   JA $↓: 3; ↓Avg: 4 ↑Avg: 4; FE $↓: 4; ↓Avg: 5 ↑Avg: 2; MR $↓: 4; ↓Avg 4;↑Avg: 3; AP $↓: 3; ↓Avg: 5;↑Avg: 3

The key differences between the Monthly & Ytd reports are in the extremes – drops & above avg lifts. Both views are critically important. Monthly shows what is currently happening in the marketplace and Ytd puts it into perspective. They also show trends over time. Ytd provides an overview while Monthly shows the details fueling the movement.

Inflation negatively affects retail growth both in the short term, with spikes or drops, and in the long term, with cumulative high prices. It can even have an impact before it happens. We are seeing this with pre-tarifflation “fear” buying. The current retail situation is not good. The YOY lifts vs 2024 are generally below the long term average for most channels. Retail seems to have “hit bottom” in February but most channels (not Gas Stations or Department stores) have showed some improvement in March and especially in April. Inflation is relatively low with some deflation, but prices are still high. We’ll continue to track the situation.

In March, YOY Commodities’ inflation slowed to 0.05% from 0.6%. Even with a very low inflation rate, high cumulative inflation vs 21 can still impact consumer spending and slow $ales growth.  We saw more evidence of this in March. Total Retail $ were +4.2% vs 24, -16% below the average 92>24 change of +5.0%. Relevant Retail was worse, +3.4%, -29% below the March average of +4.8%. The situation is complex, but the recovery is slowly restarting. We’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI.

The Census Bureau Reports are the Monthly and the Advance Retail Sales Reports. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – about 2 weeks after month end. The Monthly Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the Monthly reports. The biggest difference is that the full sample in the Monthly report allows us to “drill” a little deeper into the retail channels.

We will begin with the February Monthly Report and then go to the March Advance Report. Our focus is comparing to last year but also 21 & 19. We’ll show both actual and the “real” change in sales as we factor inflation into the data.

Both reports include the following:

• Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
• Individual Channel Data – This is more detailed in the Monthly reports, and we’ll focus on Pet Relevant Channels.

The data will be presented in detailed charts to facilitate visual comparison between groups/channels. The charts will show 11 separate measurements. To save space they will be displayed in a stacked bar format for the channel charts.

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month last year and vs 2021.
  • Current Month Real change vs last year and vs 2021 – % factoring in inflation
• Current Ytd change – % & $ for this year vs last year, 2021 & 2019.
  • Current Ytd Real change % for this year vs last year and vs 2021 and 2019
• Monthly & Ytd $ & CPIs for this year vs last year and vs 2021 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the February Monthly. All were down from January and there were 5 actual YOY sales drops – all vs 24. We should note: Gas Stations are selling less product Ytd than in 2021 & 2019. No group is “all positive” – a significant change from 4 in January. Relevant Retail has been all positive in 11 of the last 15 months and in 7 of the last 9. ($ are Not Seasonally Adjusted)

The February Monthly is $2.7B more than the Advance report. Restaurants: +$1.0B; Auto: -$1.1B; Gas Stations: +$0.2B Relevant Retail: +$2.6B. Relevant Retail was the driver in the $ales decrease vs January, but all big groups were down. A Jan>Feb decrease in Total Retail  has happened in 64% of the years since 1992. However, the -3.5% drop was 7 times the -0.5% average. There were 5 YOY drops in actual sales vs none in January. There were 8 “real” sales drops (only 2 in Jan) and no group was “all positive”. Restaurants still have the biggest increases vs 21 & 19 but Relevant Retail stayed at the top of “real” performance vs 2019. However, only 54% of their growth is real.

Now, let’s see how some Key Pet Relevant channels did in February (81% of Feb Rel Retl $)

Overall– All 11 were down from January. Vs Feb 24, 5 were actually and 4 “really” up. Vs Feb 21, 11 were up but only 6 were real increases. Vs 2019, The only negative was Off/Gift/Souv. They were actually & really down.

• Building Material Stores – The pandemic focus on home has produced sales growth of 32.1% since 2019. Prices for the Bldg/Matl group have inflated 19.9% from 21 and 22.0% from 2019 which is having an impact. Sales vs January were -4.4% for HomeCtr/Hdwe and -3.4% for Farm Stores. Vs other years, actual $ are only down monthly vs 24 for both & Ytd vs 24 for HomeCtrs. In Real $, both are up vs 2019 and Farm Stores are up Ytd vs 24. Plus, only 16% of the Building Materials group’s 19>25 lift was real. Avg 19>25 Growth: HomeCtr/Hdwe: 3.9%, Real: 0.5%; Farm: 5.4%, Real: 1.9%
• Food & Drug – Both are truly essential. Except for the pandemic food binge buying, they tend to have smaller changes in $. In terms of inflation, the Grocery rate is now 17% lower than the rate for Drug/Med products. Drug Stores are positive in all measurements and 62% of their 2019>25 growth is real. Supermarkets’ actual $ are up in all comparisons. They are only “really” down monthly vs 2024 & 2021 and Ytd vs 2021. However, only 14.1% of their 19>25 increase is real growth. Avg 19>25 Growth: Supermarkets: +5.1%, Real: +0.7%; Drug Stores: +4.7%, Real: +3.1%.
• Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down -3.7% from January, and their only positives are actual and real vs Feb 21 & 2019. Prices are still deflating, -5.3% vs 24. Deflation started in April 23 and is a big change from +1.1% in 22>23 and +7.9% in 21>22. The result is that 72.4% of their 36.2% lift since 2019 is real. Avg 19>25 Growth Rate is: +5.3%; Real: +4.0%.
• Gen Mdse Stores – All actual & real sales were up for Club/SupCtrs. $ Stores are only actually & really down vs Feb 24 and really down Ytd vs 24. Discount Dept Stores are only actually up vs 2021 & 2019. Real sales are only positive vs 2019 & only 3% of their growth since 2019 is real. The other channels have an average of 49.5% in real growth. Avg 19>25 Growth: SupCtr/Club: 5.9%, Real: 3.1%; $/Value Strs: +5.5%, Real: +2.8%; Disc. Dept. Strs: +1.7%, Real: 0.1%.
• Office, Gift & Souvenir Stores – After a -33% drop last month, sales fell -6.5% from January. However, they are only actually & really down vs 2019 & vs Feb 24. They are also really down vs Feb 21. Their recovery started late, but their progress may be slowly restarting again. Avg Growth Rate: -0.4%, Real: -1.9%
• Internet/Mail Order – Sales are -4.9% from January but still set a new February record of $103.2B. All measurements are positive, but their YOY growth, +3.5%, is only 24% of their average since 2019. However, 83.8% of their 128.4% growth since 2019 is real. Avg Growth: +14.8%, Real: +12.9%. As expected, they are by far the growth leader since 2019.
• A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell Jun>Aug, rose Sep>Nov, fell Dec>Jan 24, grew Feb>May, fell Jun>Sep, grew Oct, fell Nov, rose Dec, then fell Jan>Feb. All measurements are again positive and they are in 2^nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 79% of their 74.9% growth since 2019 is real. Average 19>25 Growth: +9.8%, Real: +8.0%

Feb had its usual drop vs Jan, but the Relative Retail drop was 2.4 times bigger than the avg. All big & small channels were down. The YOY Feb lift of +0.5% was 90% below avg for Relevant Retl and 6 smaller channels and all big groups were down. Prices are deflating in 5 channels (7 in Jan) but cumulative inflation still impacts $ as only 6 channels were really up vs Feb 21. The Retail Recovery has paused. The Feb commodities CPI was 0.6% but slowed to 0.05% in Mar. Let’s see if it impacts Retail.

Feb>Mar sales were up for all. A Feb>Mar Total Retail lift has happened every year but 2020 since 1992 and the 14.9% lift is 11.7% above avg. There were 2 YOY $ drops. There were 5 in February. $ for all Big Groups but Gas Stations were up vs Mar 24, but the Total Retail lift of 4.2% vs Mar 24 was 15.7% below their +5.0% 92>24 avg. The Relevant Retail 3.4% increase vs 24 was also significantly below their +4.8% avg (-29%). Inflation is still a factor. The CPI for all commodities slowed to 0.05% but it is 16.7% vs 21. The inflation surge was just beginning back then. There is some other pretty good “real” news. 6 “real” measurements were down. In February, there were 8. Also in February, no group was all positive. In March, Total & Relevant Retail are both all positive. That’s 8 of the last 10 months for Relevant Retail.

Overall Inflation Reality– The Total Retail CPI fell to +0.05% but the $ lift vs 24 was -16% below avg. Restaurant inflation grew to +3.8% and their sales lift was 30% below avg. Gas prices fell to -9.8%, but they are still in turmoil. Auto inflation rose to 0.3% but it is still +18.9% vs 21. Their sales grew 9.8% vs 24 (79% above avg – pre-tariff buying). Inflation rose to 0.7% for Relevant Retail. Their YOY lift was 29% below avg but they are again all positive. Slow progress has restarted.

Total Retail – Since Jun 20, every month but Apr 23, Jun 24 & Feb 25 has set a monthly $ales record. In 2023>24, Sales were on a roller coaster. Up Jul>Aug, down Sept, up Oct>Dec, down Jan 24, up Feb>Mar, down April, up May, down Jun, up Jul>Aug, down in Sep, up Oct>Jan 25, down in Feb>Mar. Prices are +0.05% but YOY sales are +4.2%, 15.7% below the 92>24 avg change of +5.0%. However, 42.1% of the 19>25 growth is real. Inflation is low but cumulative inflation is still having an impact. Growth: 24>25: 2.8%; Avg 19>25: +6.4%, Real: +2.9%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, exceeding $1T for the 1^st time in 2023. March $ are up vs 24 and they have the biggest lifts vs 21 & 19. Inflation rose to 3.8% in March and is now +25.3% vs 21 and +30.3% vs 19. Their 4.2% YOY lift is 30.1% below their +6.0% 92>24 avg. Only real Ytd vs 24 is negative, but just 35.7% of their 56.6% growth since 2019 is real. They are 3^rd in performance behind Relevant & Total Retail. Recovery started late but inflation started early. Growth: 2.8%; Avg 19>25:+7.8%, Real: +3.1%.They just account for 13.7% of Total Retail $, but their strong growth has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They worked to overcome the stay-at-home attitude with great deals and advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22, sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual $. Their YE real 2022 sales numbers were even worse, -8.2% vs 21 and -8.9% vs 19. 2023 started a true sales rollercoaster but the $ set a new record, $1.595T. $ fell in Jan 24, grew Feb>Mar, fell Apr, grew May, fell June, grew Jul>Aug, fell Sep, grew Oct, fell Nov, grew Dec, fell Jan>Feb, then grew in Mar. Mar $ were +9.8% vs 24. (79% above avg – pretariff buying). Only real $ monthly & Ytd vs 21 are negative, but only 31.3% of 19>25 growth is real. Growth: 4.9%; Avg 19>25: +5.8%, Real: +2.0%

Gas Stations – Gas Stations were hit hard by “stay at home”. They started recovery in Mar 21 and inflation began. Sales got on a rollercoaster in 22 but set a record, $583B. Inflation started to slow in Aug and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In Aug they rose to -3.7%. In Sep they were +2.7% but began deflating to -4.2% in Feb 24. In Mar>May their $ grew, fell June, rose July, fell Aug>Dec, rose Jan, fell Feb>Mar. In Mar, $ are -4.5% vs 24 and only up vs Mar 21 & Ytd vs 21 & 19. Real sales are down vs Mar 21 & Ytd vs 21 & 19. Growth: -2.0%; Avg 19>25: +3.9%, Real: -0.6%. They show the cumulative impact of inflation and how deflation can be both positive and negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for ≈60% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. Their only down month until Feb 25 was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022, but all months set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, the roller coaster continued. A December lift set a new monthly record of $494.7B & an annual record of $4.997T. Sales fell Jan>Feb 24, rose in Mar, fell in Apr, rose in May, fell in June, rose Jul>Aug, fell Sep, rose Oct>Jan 25, fell in Feb, then rose in Mar. The Mar 3.4% YOY lift is 29% below their 92>24 avg of +4.8%. However, they are all positive again and 54% of their 47.0 % 19>25 growth is real – #1 in performance. Growth: 2.6%; Avg 19>25: +6.6%, Real: +3.8%. In 2024 their inflation rate dropped from 3.2% to 0.1%, stabilized at 0.5% Dec>Jan, then rose to 0.6% in Feb & 0.7% in Mar. Inflation is low but its cumulative impact slows growth and can even cause drops. We saw this in Feb>Mar. We’ll see what happens in the upcoming months.

Inflation has slowed, but its cumulative effect can be negative. In Feb, 6 actual YOY $ comparisons for all big groups were negative. In Mar, only 2 were down. In Feb, there were 8 real drops. In Mar, there were 6. In Feb, all were down in YOY lifts vs 24. In March, only Gas Stations were down, but the lifts for all but Auto were significantly below avg. Finally, in Feb, no big group was all positive in YOY comparisons. In Mar, Total & Relevant Retail were all positive. Relevant Retail has now been all positive in 8 of the last 10 months. February was very bad. March was markedly better, but the recovery is still slow.

Here’s a more detailed look at March by Key Channels (98% of Ytd Rel Retl $)

• Relevant Retail: Growth: +2.6%; Avg: +6.6%, Real: +3.8%. All 11 were up from Feb. Vs Mar 24: 10 were up, Real: 9, Vs Mar 21: 6 were up, Real: 5. Vs 19: Only Dept Stores were down – both actually & really.
• All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are +12.6% from February but only their actual Ytd numbers vs 21 are positive. Their -5.5% Mar YOY drop is 20 times bigger than their -0.3% avg decrease. Growth: -4.0%; Avg 19>25: -0.4%, Real: -2.0%.
• Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are +13.5% from Feb, and they are positive in all measurements. However, only 48.1% of their 39.5% 19>25 lift is real. Their 1.5% YOY Mar lift is -82% below their 92>24 avg of +8.4%. Growth: 2.8%; Avg 19>25: +5.7%, Real: +2.9%.
• Grocery- They depend on frequent purchases so their changes are usually less radical. Actual $ are +8.6% from Feb and positive in all YOY comparisons. However cumulative inflation has hit them hard. Real $ are down vs Mar 24, Mar 21 & Ytd 21. Plus, only 10% of 19>25 growth is real. Their 1.0% YOY lift is -71% below avg. Growth: 2.2%; Avg 19>25: +4.9%, Real: +0.5%.
• Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are +8.9% from Feb and they are positive in all comparisons. Inflation has been relatively low so 63% of their 31.4% 19>25 growth is real. Their +6.4% YOY lift vs Mar 24 is 25% above avg. Growth: 4.3%; Avg 19>25: +4.7%, Real: +3.1%
• Clothing and Accessories – Clothes mattered less when you stayed home. That changed in March 2021 with strong growth through 2022. Actual Sales are +18.6% from Feb, and they are only really down vs Mar 21. 67% of their 19>25 growth is real. $ are +1.8% vs Mar 24, -67% below avg. Growth: 1.3%; Avg 19>25: +3.1%, Real:+2.1%
• Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are still deflating but they were high in 22. $ are +9.8% from Feb and only actually down vs Mar 21. They are really down monthly & Ytd vs 21. Only 27% of their 19>25 growth is real. YOY Mar lift: +6.0%, 62% above avg. Growth: 4.9%; Avg 19>25: +3.1%, Real: +0.9%
• Electronic & Appliances – This channel has had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are +8.3% from Feb and they are only actually down vs Mar 21 & Ytd vs 24. Their strong deflation shows in high real numbers. Sales are +1.5% vs Mar 24, -41% below avg. Growth: -1.9%; Avg 19>25: 0.15%, Real: +3.4%.
• Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices are deflating again, and sales are +26.8% from Feb. Actual $ are only up vs Mar 24 and Ytd 21 & 19. Real sales are only up vs Mar 24 and Ytd vs 24 & 19. Just 23% of their 19>25 sales growth is real. YOY sales vs Mar 24 were +4.2%, -7% below avg. Growth: -0.04%; Avg 19>25: +4.5%, Real: +1.1%.
• Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. They have been on a sales rollercoaster since June and $ are+23.6% from Feb. Actual & real sales are only up vs Mar 24 & 19. Real Ytd sales vs 24 are also up. 84% of their 19>25 growth is real. YOY Sales vs Mar 24 are +0.1%, -98% below avg. Growth: -2.5%; Avg 19>25: +4.0%, Real: +3.4%.
• All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are +14.7% vs Feb and positive in all comparisons. They are 2^nd in the % increases vs 19 & vs 21 and 73.9% of their 55.1% 19>25 growth is real. Plus, their 6.7% YOY Mar lift is 40% more than their 92>24 avg of +4.8%. Growth: +6.2%; Avg 19>25: +7.6%, Real: 5.9%.
• NonStore Retailers – 90% of their $ales comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1^st time and they broke the $1 Trillion barrier. $ are +8.5% from Feb but their YOY lift of 6.1% is -38% below their 9.8% avg. However, they are positive in all comparisons and 82% of their 112.7% 19>25 growth is real. Growth: 4.2%; Avg 19>25: +13.4%, Real: +11.6%.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its June 22 peak and 7 channels are currently deflating (up from 5 in Feb). Any deflation can help the Retail Situation. As expected, $ rose from February for all 11 channels but the +12.1% lift for Relevant Retail was slightly below avg (-0.6%) and their +3.4% lift vs March 24 was -29% below avg. 10 of 11 smaller channels had a $ increase vs 24 but only 3 of those lifts were above avg. Also in February, no big groups and only 3 channels were both actually and really “all positive”. In March the situation was a little better. 2 big groups and 4 channels were all positive. Relevant Retail has now been all positive in 8 of the last 10 months. The biggest concern is still YOY drops and smaller lifts. This has become widespread. As expected,  $ales in March were up from February, but the monthly performance, especially YOY was still below par. The Retail Market recovery has restarted but progress is slow.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups5 and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes vs 2021 to show cumulative inflation.

Monthly YOY CPI changes of 0.2% or more are highlighted. (Green = lower; Pink = higher)

Here are some answers to some obvious questions. Note: Overall Inflation slowed but grocery prices had a significant lift.

1. Why is the group for Non-store different from the Internet?
   • Non-store is not all internet. It also includes Fuel Oil Dealers, the non-motor fuel Energy Commodity.
2. Why is there no Food at home included in Non-store or Internet?
   • Online Grocery purchasing is becoming popular but almost all is from companies whose major business is brick ‘n mortar. These online sales are recorded under their primary channel.
3. 6 Channels have the same CPI aggregate but represent a variety of business types.
   • They also have a wide range of product types. Rather than try to build aggregates of a multitude of small expenditure categories, it seemed better to eliminate the biggest, influential groups that they don’t sell. This method is not perfect, but it is certainly closer than any existing aggregate.
4. Why are Grocery and Supermarkets only tied to the Grocery CPI?
   • According to the Economic Census, 76% of their sales comes from Grocery products. Grocery Products are the driver. The balance of their sales comes from a collection of a multitude of categories.
5. What about Drug/Health Stores only being tied to Medical Commodities.
   • An answer similar to the one for Grocery/Supermarkets. However, in this case Medical Commodities account for over 80% of these stores’ total sales.
6. Why do SuperCtrs/Clubs and $ Stores have the same CPI?
   • While the Big Stores sell much more fresh groceries, Groceries account for ¼ of $ Store sales. Both Channels generally offer most of the same product categories, but the actual product mix is different.

In February, YOY Commodities’ inflation slowed to 0.6% from 0.8%. Even with a low inflation rate, high cumulative inflation vs 21 can still impact consumer spending and slow $ales growth.  We saw more evidence of this in February. Total Retail $ were -0.9% vs 24, radically below the average 92>24 change of +4.9%. Relevant Retail was -0.2%, also far below the February average of +4.7%. The situation is complex, but the recovery has paused. We’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI.

The Census Bureau Reports are the Monthly and the Advance Retail Sales Reports. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – about 2 weeks after month end. The Monthly Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the Monthly reports. The biggest difference is that the full sample in the Monthly report allows us to “drill” a little deeper into the retail channels.

We will begin with the January Monthly Report and then go to the February Advance Report. Our focus is comparing to last year but also 21 & 19. We’ll show both actual and the “real” change in sales as we factor inflation into the data.

Both reports include the following:     (Note: January Monthly data = Ytd)

• Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
• Individual Channel Data – This is more detailed in the Monthly reports, and we’ll focus on Pet Relevant Channels.

The data will be presented in detailed charts to facilitate visual comparison between groups/channels. The charts will show 11 separate measurements. To save space they will be displayed in a stacked bar format for the channel charts.

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month last year and vs 2021.
  • Current Month Real change vs last year and vs 2021 – % factoring in inflation
• Current Ytd change – % & $ for this year vs last year, 2021 & 2019.
  • Current Ytd Real change % for this year vs last year and vs 2021 and 2019
• Monthly & Ytd $ & CPIs for this year vs last year and vs 2021 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the January Monthly. All were down from December but there were no actual YOY sales drops. We should note: Gas Stations are selling less product than in 2021 & 2019. They are the only group not “all positive”. Relevant Retail has been all positive in 11 of the last 14 months and now in 7 of the last 8. ($ are Not Seasonally Adjusted)

The January Monthly is $2.4B less than the Advance report. Restaurants: -$1.3B; Auto: -$0.9B; Gas Stations: +$0.3B Relevant Retail: -$0.5B. Relevant Retail was the driver in the $ales decrease vs December, but all big groups were down. A Dec>Jan decrease in Total Retail  has happened every year since 1992. However, the -16.8% drop was 21% less than average. There were no YOY drops in actual sales for the first time since January 2023. There were 2 “real” sales drops, the same as November, but all but Gas Stations were “all positive”. Restaurants still have the biggest increases vs 21 & 19 but Relevant Retail stayed at the top of “real” performance vs 2019. However, only 55% of their growth is real.

Now, let’s see how some Key Pet Relevant channels did in January (82% of Jan Rel Retl $)

Overall– All 11 were down from December. Vs Jan 24, 10 were actually and “really” up. Vs Jan 21, 10 were up but only 6 were real increases. Vs 2019, Only Off/Gift/Souv were actually & really down, but HomeCtr/Hdwe were also really down.

• Building Material Stores – The pandemic focus on home has produced sales growth of 32.1% since 2019. Prices for the Bldg/Matl group have inflated 19.6% from 21 and 22.1% from 2019 which is having an impact. Sales vs December were -10.8% for HomeCtr/Hdwe and -14.1% for Farm Stores. Vs other years, all actual $ are up for both. HomeCtr/Hdwe are really down vs 21 & 19, but Farm stores are only really down vs 21. However, only 6% of the Building Materials group’s 19>25 lift was real. Avg 19>25 Growth: HomeCtr/Hdwe: 3.4%, Real: -0.01%; Farm: 5.0%, Real: 1.6%
• Food & Drug – Both are truly essential. Except for the pandemic food binge buying, they tend to have smaller changes in $. In terms of inflation, the Grocery rate is now 17% lower than the rate for Drug/Med products. Drug Stores are positive in all measurements and 64% of their 2019>25 growth is real. Supermarkets’ actual $ are up in all measurements and they are only “really” down vs 2021. However, only 10.5% of their 19>25 increase is real growth. Avg 19>25 Growth: Supermarkets: +4.9%, Real: +0.6%; Drug Stores: +4.8%, Real: +3.2%.
• Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down -45% from December, and their only positives are vs 2019. Prices are still deflating, -3.8% vs 24. Deflation started in April 23 and is a big change from +1.1% in 22>23 and +7.9% in 21>22. The result is that 73.5% of their 41.2% lift since 2019 is real. Avg 19>25 Growth Rate is: +5.9%;Real: +4.5%.
• Gen Mdse Stores – All actual & real sales were up for Club/SupCtrs & $ stores. Plus, even with an -34.7% decrease from December, Discount Dept Stores were only really down vs 2021. Now, 34% of their growth since 2019 is real. The other channels do better with an average of 53% in real growth. Avg 19>25 Growth: SupCtr/Club: 5.8%, Real: 3.2%; $/Value Strs: +5.6%, Real: +2.9%; Disc. Dept. Strs: +2.4%, Real: 0.8%.
• Office, Gift & Souvenir Stores – After a +38.2% lift in December, Sales fell -32.4% in January. However, now they are only actually & really down vs 2019. All other comparisons are positive. Their recovery started late, but their progress may be slowly restarting again. Avg Growth Rate: -0.04%, Real: -1.5%
• Internet/Mail Order – Sales are -26.8% from December but set a new January record of $108.4B. All measurements are positive, but their YOY growth, +2.8%, is only 19% of their average since 2019. However, 84.5% of their 126.8% growth since 2019 is real. Avg Growth: +14.6%, Real: +12.9%. As expected, they are by far the growth leader since 2019.
• A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell Jun>Aug, rose Sep>Nov, fell Dec>Jan 24, grew Feb>May, fell Jun>Sep, grew in Oct, fell in Nov, rose in Dec, fell in Jan. All measurements are again positive and they are in 2^nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 80% of their 75.2% growth since 2019 is real. Average 19>25 Growth: +9.8%, Real: +8.1%

Jan had its usual drop vs Dec, but the Relevant Retail drop was 25% less than avg. All big & small channels were down. The YOY lift was 7% below avg for Total and 18% below for Relevant, but 10 smaller channels and all big groups were up. Prices are still deflating in 7 channels, but cumulative inflation is impacting $ as only 6 channels were really up vs Jan 21. The Retail Recovery is still slow. The Jan commodities CPI was 0.8% but slowed to 0.6% in Feb. Let’s see if it impacts Retail.

Jan>Feb sales were down for all but Auto. A Jan>Feb Total Retail decrease has happened in 64% of the years since 1992 but the -4.0% drop is 8 times the -0.5% avg. There were 6 YOY $ drops. There were none in January. $ for all Big Groups were down vs Feb 24. The Total Retail drop of -0.9% vs Feb 24 was very different from their +4.9% 92>24 avg change. The Relevant Retail drop of -0.2% vs 24, was also much worse than their +4.7% avg. Inflation is still a factor. The CPI for all commodities slowed to 0.6% but it is 18.1% vs 21. The inflation surge was just beginning back then. There is some other “real” bad news. 8 measurements were “really” down. In January, there were only 2 – both from Gas Stations. Also in January, all but Gas Stations were YOY all positive. In February, there were no “all positives”. However, Relevant Retail has still been all positive in 7 of the last 9 months.

Overall – Inflation Reality– For Total Retail, inflation fell to +0.6% from 0.8% but sales were -0.9% vs 24. For Restaurants, inflation grew to +3.7% and their sales fell -2.3% vs 24. Gas prices fell, but $ales were -4.4%. That group is still in turmoil. Auto inflation slowed to 0.1% but it is still +19.8% vs 21. Their sales fell -0.9% vs 24. Inflation rose slightly to 0.6% from 0.5% for Relevant Retail. Their sales fell -0.2% and they are no longer all positive. Their slow recovery has paused.

Total Retail – Since Jun 20, every month but Apr 23, Jun 24 & now Feb 25 has set a monthly $ales record. In 2023>24, Sales were on a roller coaster. Up Jul>Aug, down Sept, up Oct>Dec, down Jan 24, up Feb>Mar, down April, up May, down Jun, up Jul>Aug, down in Sep, up Oct>Jan 25, down in Feb. Prices are +0.6% but YOY sales are -0.9%, far below the 92>24 avg change of +4.9%. However, 41.6% of the 19>25 growth is real, up from 39%. Inflation is low but cumulative inflation is still having an impact. Growth: 24>25: 1.8%; Avg 19>25: +6.6%, Real: +3.6%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, exceeding $1T for the 1^st time in 2023. February $ are down vs 24 but they have the biggest lifts vs 21 & 19. Inflation rose to 3.7% in February and is now +25.0% vs 21 and +30.0% vs 19. Their -2.3% YOY drop is far below their +5.9% 92>24 avg. Plus, just 35.9% of their 56.5% growth since 2019 is real and they remain 3^rd in performance behind Relevant & Total Retail. Recovery started late but inflation started early. Growth: 1.5%; Avg 19>25:+7.7%, Real: +3.1%. They just account for 13.6% of Total Retail $, but their strong growth has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They worked to overcome the stay-at-home attitude with great deals and advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22, sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual $. Their YE real 2022 sales numbers were even worse, -8.2% vs 21 and -8.9% vs 19. 2023 started a true sales rollercoaster but the $ set a new record, $1.595T. $ fell in Jan 24, grew Feb>Mar, fell Apr, grew May, fell June, grew Jul>Aug, fell Sep, grew Oct, fell Nov, grew Dec, fell Jan, then grew in Feb. Feb $ were up vs Jan but -0.7% vs 24. (Avg Feb Chge: +4.9%). All other comparisons are positive, but only 31.8% of 19>25 growth is real. Growth: 2.6%; Avg 19>25: +5.9%, Real: +2.1%

Gas Stations – Gas Stations were hit hard by “stay at home”. They started recovery in Mar 21 and inflation began. Sales got on a rollercoaster in 22 but set a record, $583B. Inflation started to slow in Aug and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In Aug they rose to -3.7%. In Sep they were +2.7% but began deflating to -4.2% in Feb 24. In Mar>May they grew, fell June, rose July, fell Aug>Dec, rose Jan, fell Feb. In Feb, actual $ are -4.4% vs 24 but up vs 21 & 19. Real sales are down vs Feb 24 & Ytd vs 21 & 19. (avg Feb chge: +5.5%). Growth: -0.8%; Avg 19>25: +4.3%, Real: -0.8%. They show the cumulative impact of inflation and how deflation can be both positive and negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for ≈60% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. Their only down month until Feb 25 was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022, but all months set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, the roller coaster continued. A December lift set a new monthly record of $494.7B & an annual record of $4.997T. Sales fell Jan>Feb 24, rose in Mar, fell in Apr, rose in May, fell in June, rose Jul>Aug, fell Sep, rose Oct>Jan 25, then fell in Feb. The Feb -0.2% YOY drop is a big change from their 92>24 avg of +4.7%. However, 55% of their 46.9 % 19>25 growth is real – #1 in performance. Growth: 1.9%; Avg 19>25: +6.6%, Real: +3.8%. In 2024 their inflation rate dropped from 3.2% to 0.1%, stabilized at 0.5% Dec>Jan, then rose to 0.6% in February. Inflation is low but its cumulative impact continues to slow growth and even cause drops. We saw this in February. We’ll see what happens in the upcoming months.

In 24>25 inflation has slowed, but its cumulative effect still has a negative impact. In Jan, all actual YOY $ comparisons for all big groups were positive. In Feb, 6 were down. In Jan, there were only 2 real drops. In Feb, there were 8. In Jan YOY lifts vs 24, Total Retails was +4.4% and all groups were over +2.9%. In Feb, all were down vs 24, a big contrast to an avg lift over 4.7% for all. Finally, in January, 4 big groups were all positive in YOY comparisons. In Februar, none were all positive, even Relevant Retail (All positive in 7 of the last 9 months). February was very bad. The slow retail recovery has paused.

Here’s a more detailed look at February by Key Channels (98% of Ytd Rel Retl $)

• Relevant Retail: Growth: +1.9%; Avg: +6.6%, Real: +3.8%. 10 were down from Jan. Vs Feb 24: 6 were up, Real: 5, Vs Feb 21: 10 were up, Real: 9. Vs 19: Dept Stores were actually & really down. Plus, Electronics/Appl were actually down.
• All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are -2.4% from January and only their actual & real numbers vs 21 are positive. Their -7.5% Feb YOY drop is 19 times bigger than their -0.4% avg decrease. Growth: -3.2%; Avg 19>25: -0.003%, Real: -1.6%.
• Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -3.9% from Jan, but they are positive in all measurements. However, only 49.5% of their 40.6% 19>25 lift is real. Their 1.2% YOY lift is -85% below their 92>24 avg of +8.3%. Growth: 3.7%; Avg 19>25: +5.8%, Real: +3.1%.
• Grocery- They depend on frequent purchases, so their changes are usually less radical. Actual $ are -8.7% from Jan but positive in all YOY comparisons. However cumulative inflation has hit them hard. Real $ are down vs 21 & Feb 24. Plus, only 12% of 19>25 growth is real. Their 0.5% YOY lift is -84% below avg. Growth: 2.8%; Avg 19>25: +5.0%, Real: +0.7%.
• Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are -6.5% from Jan but they are positive in all comparisons. Inflation has been relatively low so 61% of their 31.1% 19>25 growth is real. Their +2.5% YOY lift vs Feb 24 is -51% below avg. Growth: 3.4%; Avg 19>25: +4.6%, Real: +2.9%
• Clothing and Accessories – Clothes mattered less when you stayed home. That changed in March 2021 with strong growth through 2022. Actual Sales are +5.9% from Jan and only down vs Feb 24, -3.2%. Their avg Feb YOY change is +3.5%. Real sales are down vs 24 but 72% of their 19>25 growth is real. Growth: 0.5%; Avg 19>25: +3.3%, Real:+2.5%
• Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority.5. Prices are still deflating but they were high in 22. Sales are -1.3% from Jan but only “really” negative vs 21. However, only 31% of their 19>25 growth is real. YOY Feb lift: +1.5%, -54% below avg. Growth: 3.8%; Avg 19>25: +3.2%, Real: +1.0%
• Electronic & Appliances – This channel has had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are -8.0% from Jan and they are only positive vs 21 & “really” vs 19. They have had strong deflation and it shows. Sales are -9.2% vs Feb 24. The avg Feb change is +2.6%. Growth: -4.7%; Avg 19>25: -0.05%, Real: +3.2%.
• Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices stopped deflating and sales are -3.7% from Jan. Actual sales are only up vs 21 & 19 and Real sales are only up vs 19. Just 17% of their 19>25 sales growth is real. YOY sales vs Feb 24 were down -5.8%. The avg Feb change is +4.5%. Growth: -2.5%; Avg 19>25: +4.2%, Real: +0.8%.
• Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. They have been on a sales rollercoaster since June and $ are -6.7% from Jan but actual and real sales vs 21 & 19 are now positive. Plus, 82% of their 19>25 growth is real. YOY Sales vs Feb 24 are -5.8%. Their 92>24 avg Feb change is +3.0%. Growth: -3.8%; Avg 19>25: +3.9%, Real: +3.2%.
• All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are -4.5% vs Jan but positive in all comparisons. They are 2^nd in the % increases vs 19 & vs 21. 73.3% of their 51.7% 19>25 growth is real. However, their 0.6% YOY Feb lift is -84% below their 92>24 avg of +4.2%. Growth: +4.4%; Avg 19>25: +7.2&%, Real: 5.5%.
• NonStore Retailers – 90% of their $ comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1^st time and they broke the $1 Trillion barrier. $ are -7.0% from Jan and their YOY lift of 1.7% is -83% below their 9.7% avg. However, they are positive in all comparisons and 82% of their 109.3% 19>25 growth is real. Growth: 2.2%; Avg 19>25: +13.1%, Real: +11.3%.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its June 22 peak and 6 channels are currently deflating (down from 7 in Jan). Any deflation can help the Retail Situation. As expected, $ fell from January for 10 of 11 channels but the -5.5% drop for Relevant Retail was 2.75 times more than avg. Their -0.2% drop vs Feb 24 was a big change from their +4.7% avg. 6 of 11 smaller channels had a $ increase vs 24 but none of those lifts was above avg. Also in January, 4 big groups and 6 channels were both actually and really “all positive”. In February, there were only 3 – NonStore, Miscellaneous & Club/SupCtr/$. Even with this change, Relevant Retail has been all positive in 7 of the last 9 months. The biggest concern are YOY drops and smaller lifts. This has become widespread. As expected, February $ were less than January, but its performance, especially YOY was markedly worse. It looks like the Retail Market has paused in its slow recovery.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes vs 2021 to show cumulative inflation.

Monthly YOY CPI changes of 0.2% or more are highlighted. (Green = lower; Pink = higher)

Here are some answers to some obvious questions. Note: Overall Inflation slowed and there is more pricing stability.

1. Why is the group for Non-store different from the Internet?
   • Non-store is not all internet. It also includes Fuel Oil Dealers, the non-motor fuel Energy Commodity.
2. Why is there no Food at home included in Non-store or Internet?
   • Online Grocery purchasing is becoming popular but almost all is from companies whose major business is brick ‘n mortar. These online sales are recorded under their primary channel.
3. 6 Channels have the same CPI aggregate but represent a variety of business types.
   • They also have a wide range of product types. Rather than try to build aggregates of a multitude of small expenditure categories, it seemed better to eliminate the biggest, influential groups that they don’t sell. This method is not perfect, but it is certainly closer than any existing aggregate.
4. Why are Grocery and Supermarkets only tied to the Grocery CPI?
   • According to the Economic Census, 76% of their sales comes from Grocery products. Grocery Products are the driver. The balance of their sales comes from a collection of a multitude of categories.
5. What about Drug/Health Stores only being tied to Medical Commodities.
   • An answer similar to the one for Grocery/Supermarkets. However, in this case Medical Commodities account for over 80% of these stores’ total sales.
6. Why do SuperCtrs/Clubs and $ Stores have the same CPI?
   • While the Big Stores sell much more fresh groceries, Groceries account for ¼ of $ Store sales. Both Channels generally offer most of the same product categories, but the actual product mix is different.