Information by distribution channel

Retail Channel $ Update – March Final & April Advance

While inflation continues to slow, its cumulative effect on consumer spending is now being felt. The rate of sales increases has slowed even more than inflation. This has caused a drop in the amount of product sold in many channels. Some have even turned negative in the actual $ sold vs previous years. A recession is the biggest fear, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for March and then go to the Advance Report for April. Our focus is comparing to last year but also 2021 and 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill 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 in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the March Final. All were up from last month and only Gas Stations and Auto had any decreases vs 21 or 22. When you consider inflation, Auto was down vs 21 and Gas Stations vs 19 & 21. Total Retail & Relevant retail were really down vs Apr 21 but Relevant Retail was also down for the month & Ytd vs 2022. (All $ are Actual, Not Seasonally Adjusted)

The March Final is $6.0B less than the Advance Report. Specifically, Restaurants: -$4.6B; Gas Stations: -$0.7B; Auto: +0.9B; Relevant Retail: -$1.6B. Sales were up from February as expected and consumers continue to spend more vs last year in all but Gas Stations. In fact, Total Retail, Restaurants & Relevant Retail were positive in all actual Sales measurements vs 22, 21 & 19. Auto was “really” down vs 21 and Gas Stations are really down Ytd vs 21 & 19. The most significant change is that the real sales for Relevant Retail vs 2022 turned negative again. It has now been down for 11 of the last 12 months. They are still in 1st place in performance since 2019 but only 50% of their growth is real.

Now, let’s see how some Key Pet Relevant channels did in March in the Stacked Bar Graph Format

Overall– All 11 were up from Feb, but vs 22, 10 were up vs Mar and Ytd. 8 were “really” down monthly & 6 Ytd. Vs 2021, 7 had increases but only 3 monthly were real and 4 Ytd. Vs 2019, Office/Gift/Souvenir was the only real negative.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 38.7% since 2019. Prices for the Bldg/Matl group have inflated 23.4% since 2021 which is having an impact. HomeCtr/Hdwe stores are down for the month vs 22 & 21 & Ytd vs 22. Farm Stores are a little better, only down vs March 2021. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 22.1% of their 19>23 lift was real. It was only this high because most of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 8.2%, Real: 2.2%; Farm: 10.6%, Real: 4.5%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The rate for Grocery products is over 2 times higher than for Drugs/Med products. Drug Stores are positive in all numbers vs 22, 21 & 19 and 75% of their growth since 2019 is real. While the $ are up for Supermarkets their 2023 real sales are down vs 2022 & 2021 and just slightly positive vs 2019. Only 10% is real growth. Avg 19>23 Growth: Supermarkets: +6.4%, Real: +0.7%; Drug Stores: +5.1%, Real: +3.8%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 30% from February, slightly positive vs 2022 but down vs 2021. Real sales are only positive Ytd vs 2022. Their current inflation rate is 1.1%, a big drop from +5.4% in 21>22 and +6.5% in 20>21. The result is that 59% of their 45.4% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.8%; Real: +6.1%.
  • Gen Mdse Stores – All channels are up vs February. In actual sales, the only negative was Disc Dept Stores Ytd vs 2021. In real sales, the only positives were in monthly & Ytd sales for $/Value Stores vs 2022. Disc Dept Stores have the worst performance of any channel in all measurements and only 17% real growth since 2019. The other channels average 36%. Avg 19>23 Growth: SupCtr/Club: 6.1%, Real: 2.2%; $/Value Strs: +6.4%, Real: +2.4%; Disc. Dept.: +3.3%, Real: +0.6%
  • Office, Gift & Souvenir Stores – Actual sales are up from February and in all measurements vs 2022, 2021 & 2019. However, their real sales growth is still down monthly vs 2022 & 2021 and Ytd vs 2019. Their recovery didn’t start until the spring of 2021, but they are making progress. Avg Growth Rate: +1.2%, Real: -1.5%
  • Internet/Mail Order – Sales are up +13.0% from February and above $100B, a monthly record. They are positive for all measurements, but their growth rate is only 43% of their average since 2019. However, 80% of their 101.3% growth since 2019 is real. Avg Growth Rate: +19.1%, Real: +16.0%. As expected, they are by far the growth leaders 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, then turned up in March. Real sales are down vs March & Ytd 2022, but all other measurements are positive. They are still the % increase leaders vs 2021 and 73% of their 59.5% growth since 2019 is real. Average 19>23 Growth: +12.4%, Real: +9.4%. They remain 2nd in growth since 2019 to the internet. I’m sure that Pet Stores are contributing.

There is no doubt that high inflation is an important factor in Retail. In actual $, 10 channels reported increases in sales vs 2022 and 7 vs 2021. When you factor in inflation, the number with any “real” growth drops to 3 vs 2022 & 2021. Inflation is slowing but not as fast as sales increases. Inflation has increased its impact at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ales for April.

Since 2019, we have seen the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $700B in a month for the first time and broke the $7T barrier in 2021. Relevant Retail was also strong as annual sales reached $4T in 2021 and all big groups set annual $ales records. In 2022 radical inflation was a big factor with the largest increase in 40 years. At first, this reduces the amount of product sold but not $ spent. Total Retail hit $8T and all groups again set new annual records in 2022. In 2023, sales fell for all groups in Jan>Feb, rose in March then fell in April. Except for dips by Auto & Gas Stations, all actual sales are slightly positive. The biggest change is that of the groups’ total of 20 “real” sales measurements vs 22 & 21, only 6 are positive. 3 of those are from Restaurants but even their sales vs April 2022 are really down. This clearly shows the growing impact of cumulative inflation.

Overall – Inflation Reality – The April $ increase rate for all vs 2022 was below the inflation rate, producing negative real numbers. You also see the impact of cumulative inflation as real sales are down for all but Restaurants vs 2021. Restaurants still have the strongest performance vs 2022, 2021 & 2019. The biggest negative is in Relative Retail. Monthly & Ytd Real sales are down vs 2022 & 2021. Consumers pay more but buy less.

Total Retail – Every month since June 2020 has set a monthly sales record. December 2022 $ were $748.9B, a new all-time record. Sales dipped in Jan>Feb, rose in March then fell in April. Inflation is slowing but so is sales growth. Sales are up 0.2% vs last year. That’s the lowest rate since the -6.7% drop in May 2020. Also, real sales are down vs April 22 as well as monthly and Ytd vs 21. Plus, only 36% of the 19>23 growth is real. Inflation is slowing but it has been above 4% since March 2021. We are starting to see the cumulative impact. Avg 2019>23 Growth: +8.1%, Real: +3.2%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They are the best performing big group vs 22, 21 & 19. Inflation decreased to 8.4% in April from 8.6% last month but is still +16.1% vs 21 and +20.6% vs 19. 42.0% of their 41.9% growth since 19 is real but that is less than the 53.3% of their 40.7% growth since 21. Recovery started late but inflation started early. Avg 2019>23 Growth: +9.1%, Real: +4.1%. They just account for 13.1% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of 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 2022 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 2021>2022. This is bad but their real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 started off a little better but got worse in March & April. April $ are down vs 22 & 21 and Ytd Real sales vs 2021 are also down. Their Ytd real sales vs 19 are still positive but slowing, despite continued deflation. Avg 2019>23 Growth: +6.9%, Real: +1.0%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb then dropped 17% in Mar and 12.4% in April. However, prices are still +31.0% vs 21. The deflation actually caused monthly & Ytd sales vs 22 to drop but Ytd real sales are up. However, all real sales vs 21 & 19 are still down. Avg 2019>23 Growth: +6.9%, Real: -1.3%.The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a 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. However, their only down month was April 2020 and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, Jan & Feb had normal drops. Sales in March turned up then fell in April. All actual sales are up vs 22, 21 & 19 but all real sales vs 22 & 21 are down. Real sales vs last year have now been negative in 12 of the last 13 months. 49% of their 19>23 $ are real, which shows that Inflation is a problem that began in 2022. Their Avg 2019>23 Growth is: +8.5%, Real: +4.4%. The performance of this huge group is critically important. This is where America shops. The fact that real sales are down again is bad news.

Inflation is slowing slightly but the impact is growing. Sales increases are slowing, and the fact that 70% of all real sales measurements vs 22 & 21 are negative is very concerning. Restaurants are still doing well while Auto & Gas Stations are still struggling despite ongoing deflation. However, the biggest concern is Relevant Retail. They have definitely returned to Inflation Phase II – Consumers spend more but the amount bought decreases. The Apr sales increase rate is the lowest since the pandemic drop in April 20. This can lead to Phase III, when actual sales drop. Let’s hope for a turnaround.

Here’s a more detailed look at April by Key Channels in the Stacked Bar Graph Format

  • Relevant Retail: Avg Growth Rate: +8.5%, Real: +4.4%. Only 3 channels were up from March but 5 were up vs 22 & 7 vs 21. Only 3 had a “real” increase vs 22 and 5 vs 21. The negative impact of inflation is visible in both actual & real data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are down from March but up for all comparisons but vs April 22. However, their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +1.0%, Real: -1.7%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are up from March and in all other measurements. Their real sales are also up slightly in all measurements but Ytd vs 21. Only 36% of their 28.5% 19>23 lift is real – the impact of inflation. Avg Growth: +6.5%, Real: +2.5%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are down from March but up in all measurements vs 22, 21 & 19. However, inflation hit them hard. Real sales are down for all but Ytd vs 2019 and only 9.6% of the growth since 2019 is real. Avg Growth: +6.4%, Real: +0.7%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from March but up in all other measurements, both actual and real vs 22, 21 & 19. Their inflation rate has been low so 75% of their 22.1% growth from 2019 is real. Avg 2019>23 Growth: +5.1%, Real: +3.9%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual Sales are down from March and vs April 22. Real sales are down vs April 22 & 21 and Ytd vs 22. However, 62% of their 2019>23 growth is real. Avg 2019>23 Growth: +3.7%, Real:+2.4%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation has slowed but was very high in 2022. Sales are down from March and in all measurements but Ytd vs 21 & 19. Their real sales are all down vs 22 & 21 and only 8% of their 19>23 growth is real. Avg 2019>23 Growth: +4.7%, Real: +0.4%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are down vs March and in all measurements but Ytd vs 21 & 19. However, real sales are up for all but vs April 22. This happened because of strong deflation, -6.4>-7.6%. Avg 2019>23 Growth: +0.6%, Real: +2.4%.
  • 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. Sales are up 4% vs last month – 2 consecutive increases. The only other positives are Ytd vs 21 & 19. They have the highest Inflation of any channel so real sales are negative in all but Ytd vs 2019. Also, just 22% of their % sales growth since 2019 is real. Avg 2019>23 Growth is: +7.9%, Real: +1.9%.
  • 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. $ales are down from March and in all other measurements but Ytd vs 22 & 19. Real sales are all down except vs 19. Just 3 months ago all measurements were positive. Their inflation is lower than most groups so 62% of their growth since 2019 is real. Avg 2019>23 Growth: +6.5%, Real: +4.1%.
  • 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 up from March and for all but real April 23 vs 22. They still have the biggest increase vs 2021 and vs 2019 they are 2nd only to NonStore. 68% of their 42.8% 19>23 growth and even 50% of their 21>23 growth is real. Their Avg 19>23 Growth is: 9.9%, Real: 7.0%.
  • NonStore Retailers – 90% of their volume 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 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are down from March but all measurements are positive. 78% of their 89.2% growth since 2019 is real. Their Avg Growth: +17.3%, Real: +14.1%.

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, and in most product categories it has slowed in Jul>Apr which should improve the Retail Situation. Sales were down from March for all big groups and 8 of 11 smaller channels. While Inflation continues to slow in most channels, some channels like Auto, Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling. Only a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed and is now below the lower inflation rate. This is evident in Relevant Retail as Real sales are now negative for all but Ytd vs 2019. However, actual & real sales vs 22 are now negative for most channels. Only 3 – NonStore, Clubs/$ Strs & Health Care are both actually and really positive vs 22. We seem to have returned to Inflation, Phase II, increased $ales but a decrease in the amount sold. However, some channels may be moving to Phase III, when actual $ales also decrease.

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 from 2021 to 2023 to show cumulative inflation.

Monthly 22>23 CPI changes of 0.2% or more are highlighted. (Green = lower; Pink = higher)

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

Inflation: A Historic Look – 1992 > 2022

There is no doubt that the current inflation wave is big news with rates higher than we have seen in decades. Through a series of graphs, we hope to put the current situation into a better perspective. We will track the change in CPI of a few key, major expenditure groups over the last 30 years – from 1992 to 2022, then show the evolving impact on Total Retail and a major Pet Relevant channel. In our 1st chart we will compare the CPI change of the 2 biggest groups – Commodities and Services so that we can better appreciate their influence on the National CPI.

We will show the specifics for certain years including: every 10 years, the great recession, and the pandemic. There are also some data highlights: light blue = deflation, red = the highest annual inflation rate; pink = 2nd highest rate; yellow = 3rd highest rate.

In what may be a surprise to many of you, the Services segment leads the way in Inflation. They also have the biggest share of the CPI index, 60%, + or minus 4%, every year from 1992 to 2022. We should note that mortgage payments/rent (a service expenditure) accounts for 1/3 of the total CPI number. This is major part of the budget for most households, but changes occur less frequently since the price is generally determined by mortgages or leases.

  • Services – There were no deflationary years for Services. Prices just kept increasing. They had doubled by 2017 (25 yrs) and had increased by 139% in 2022, which produced an annual average inflation rate of +2.9%. The 3 biggest increases occurred in: 2022 = +6.2% (No surprise); 2001 = +4.1%; 2006 = 3.8%. Inflation did slow a little during the great recession 2009>11 and actually fell below 1% to +0.8% in 2010. We have a similar pattern for Services in the Pet Industry. The CPI for Veterinary and Non-Vet Services has been tracked since 1997. Prices for both segments have increased every year but at a higher rate than for National Services. Non-Vet Services = +3.3%; Veterinary = +4.7%.
  • Commodities – These are products. They have a wide range – from Food at Restaurants to gasoline to groceries. You can see that the pricing is much more volatile for this group. They have increased by 71% since 1992 for an annual average increase of +1.8%, 38% below Services. Prices have also deflated in 5 years, with the biggest drop -3.3% in 2015. The second biggest drop, -2.9% occurred in 2009 in the heart of the Great Recession, but they quickly recovered. A very significant trend started in 2013 as prices stabilized then fell in 2015. They essentially remained at this lower level until the beginning of the Pandemic Pricing surge in 2021. This surge produced the 2 highest annual inflation rates for this group: 2022 = +10.9%; 2021 = +7.8%.
  • National CPI – In 2022, prices reached double the level of 1992, with an average annual inflation rate of +2.5%. While inflation in Commodities segments, like Groceries and Gasoline get far more publicity, the Services group has slightly more influence over the National numbers. However, big changes in any large segment, like Gasoline or Groceries can definitely have an impact. The size and consistent inflation of Services has driven the National CPI up every year but 2009, -0.4%. The 2 biggest increases occurred in 2022 = +8.0%; 2021 = +4.7%. However, because of the frequency of purchases, inflation in Commodities is more noticeable. Let’s take a closer look.

The next graph compares 30 years of Commodity inflation to one of its subcategories – Pet Products. While the CPIs for individual Pet Industry Segments have only been tracked since 1997, the pricing of Pet Products (Pets, Food & Supplies) has been recorded since 1977. The US BLS recognized that Pets were an important part of U.S. Households long before there were any major Pet chains, SuperStores or even “Pet Parents”. Remember, in 1992 and earlier most pet products were purchased in Grocery stores. According to the Economic Census, this didn’t change until 1997.

As you can see the inflation patterns for Commodities and Pet Products were basically the same until 2008. Both turned up in 2008, but the Pet Products lift was the biggest single year increase from 1992>22 for Pet Products, +9.19%. This was followed by a +7.2% increase in 2009. Prices rose 17% in 2 years. In reaction to the Recession, Commodities prices fell -2.9% in 2009 and Pet Products fell -1.0% in 2010. Both recovered quickly and prices essentially flattened out for Commodities until 2021 and Pet Products until 2022. There was some minor turmoil as most of the deflationary years for both occurred during this “flat” period – Pet Products (4 of 6) and Commodities (3 of 5). For both the highest inflation occurred in 2022 – Pet Products (+9.18%) and Commodities (+10.9%). Commodities prices increased +19.6% from 2020 to 2022. While Pet Products still has the bigger cumulative increase at +74%, Commodities, at 71%, significantly narrowed the gap. Except for the timing of their big 2 year “lift” these 2 groups have a very similar pricing pattern.

Now let’s look at the impact of inflation on sales. Price Inflation can reduce the amount of product sold. At the very least it reduces the “real” amount of a sales increase. Consumers get less for their money. In our next graph we will track the sales for Total Retail from 1992 to 2022. We will factor inflation into the numbers to show the “real” increase in product sold over the years. We are using the All Commodities CPI in our calculations. It’s an accurate representation. The Census Bureau defines a retail outlet as one whose primary business is the sale of products to consumers. This ranges from restaurants to gas stations to department stores. Note: The outlet may also sell services but not a significant amount.

Actual Total Retail Sales quadrupled in 30 years from $2T to 8T. There were only 2 years when they declined 2008 & 2009, which was due to the onset of the Great Recession (Pink highlights). The market recovered in 2011. It took a total of 4 years to get back to 2007 Sales numbers. (Black Outline). It took 13 years for sales to double from $2T to $4T and another 13 to reach $6T. However, the Pandemic Recovery in 2021 & 2022 pushed the market from $6T to $8T in just 4 years. $1.9T of the lift occurred from 2020>2022 with $1.2T occurring in 2021 and $0.7T in 2022. These are the 2 largest annual increases from 1992>22. The average annual increase for Total Retail $ over 30 years was +4.8%.

The Commodities CPI increased by 71% in 30 years, an average annual inflation rate of +1.8%. Prices deflated in 5 years with the biggest drop, -3.3% occurring in 2015. The biggest lifts prior to the Pandemic period occurred in 2008, +4.3% and 2011, +5.3%. After the 2011 increase prices remained close to the +45% cumulative level until the big lifts in 2021 (+7.8%) and 2022 (+10.9%). Commodity Prices rose 19.6% in just 2 years. The biggest prior 2 year increase was +8.3% in 2010>11. The current lift is more than twice as large and must impact retail sales.

“Real” Total Retail Sales increased 136% from 1992 to 2022, an average annual increase of 2.9%. They declined in 3 years. The 2008 & 2009 declines mirrored the drops in Actual Sales but 2022 was different. Due to +10.9% inflation, Cumulative real sales declined despite a +9.1% increase in actual sales. There are other examples of the impact of inflation. Actual Sales recovered from the 2008>09 drops in 4 years. For real sales it took 2 years longer. Also, Actual Sales doubled in 13 years. It took 25 years for Real Sales. Finally, the goal is to always have over 50% of the cumulative actual sales increase to be real. This was true in Total Retail for 25 of 30 years. The percentage was below 50% from 2011>14 but hit bottom at 45% in 2022. Real sales is a measure of the amount of product sold. High inflation can negatively affect consumer spending. At first, they spend more but get less. If it continues, it can lead to a drop in spending.

Now, we’ll turn to the data that you’ve all been waiting for – the impact of Pet Products inflation on Pet Store Sales.

As you can see, this graph is different from the others. The primary reason is that monthly and annual sales data for Pet Store $ales is still not reported by the Census Bureau even though their own numbers from the Economic Census show that Pet Store sales exceed the amount sold by at least 6 other channels that are reported monthly. The data reported is from the Economic Census which occurs every 5 years. We will have the 2022 numbers in the Fall of 2024. To give you a 30 year look I gathered data going back to 1987. The data is plotted by Total Sales $ for the reporting years rather than by % of increase from 1987. The Real Sales $ were computed by factoring in cumulative Pet Products inflation from 1987. The US BLS has been gathering this CPI data monthly since 1977. This is a good CPI match as even with the growth of Services, Pets & Pet Products accounted for 93+% of Pet Store Sales in 2017, according to the Economic Census. The % shown next to the “real” $ reflects the amount of the Actual cumulative $ increase that is real.

The growth is beyond spectacular. From 1987 to 2017, Actual $ales increased by $17B, (1250%) with an average annual increase of +9.1%. This spectacular growth was due to a number of factors – the creation and growth of Pet Chains and SuperStores, the transition from Pet Owners to Pet Parents, Baby Boomers moving into their higher income years and the increasing personalization of our Pet Children. Real Sales growth was +9B, (660%) with an annual growth rate of +7.0% – still amazing! About the only negative to be found is in the definite drop in the percentage of actual growth that is real. In the 90s it was above 70%. It fell into the 60+% range at the start of the Millennium but since 2012 it has dropped into the low 50s. This was primarily driven by extreme inflation from 2006>09, +21%. Prices deflated -1.2% from 2012>17 which caused the slight increase in % so there is no doubt that inflation has a real retail impact. That leaves us to  wonder what will happen in 2022. We already know the CPI facts. Pet Product Prices only increased +3.8% from 2017>21 but then jumped +9.2% in 2022 and are now double what they were in 1987. We look forward to getting the Sales data. A first “peak” will come from the mid-year 2022 Consumer Expenditure Survey which will be released shortly.

Retail Channel Monthly $ Update – February Final & March Advance

By 2021, the market had generally recovered from the impact of the pandemic. In 2022 & 2023, we were hit by extreme inflation, with some rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for February and then go to the Advance Report for March. Our focus is comparing to last year but also 2021 and 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill 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 in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the February Final. All but Auto were down from last month, but all but Gas Stations were up vs February of 22 & 21. Considering inflation, all were really up for the month & Ytd vs 2022. Vs 2021 & 2019 only Auto & Gas Stations had any “real” negatives. Here are the specifics for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The February Final is $2.9B more than the Advance. All were up. Restaurants: +$0.6B; Gas Stations: +$0.4B; Auto: +1.4B; Relevant Retail: +$0.6B. Except for Auto, sales were down from January as expected, but consumers continue to spend more vs last year in all but Gas Stations. In fact, Total Retail, Restaurants & Relevant Retail were positive in all measurements vs 22, 21 & 19. Auto was “really” down vs 21 and Gas Stations are really down Ytd vs 21 & 19. The most significant change is that the real sales for Relevant Retail vs the previous year are now positive for the first time in 10 months. They are now tied with Restaurants for 1st place in performance since 2019 but only 50% of their growth is real.

Now, let’s see how some Key Pet Relevant channels did in February in the Stacked Bar Graph Format

Overall– 8 of 11 were down from Jan but vs 22, 10 were up vs Feb and all Ytd. 4 were really down monthly & Ytd. Vs 2021, all had increases. 8 monthly were real and 7 Ytd. Vs 2019, Office/Gift/Souvenir was the only real negative.

  • Building Material Stores – The pandemic caused consumers to focus on their homes which has produced sales growth of 35.4% since 2019. Home Ctr/Hdwe has the most Ytd growth vs 2021, but Farm stores are the leaders vs 2022 & 2019. Prices for the Bldg/Matl group have inflated 23.7% since 2021 which has produced all negative real numbers vs 2022 & 2021. Importantly, only 24.0% of their 19>23 lift was real. It was only this high because half of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 7.6%, Real: 1.8%; Farm: 9.3%, Real: 3.4%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The rate for Grocery products is over 3 times higher than for Drugs/Med products. Drug Stores are positive in all numbers vs 22, 21 & 19 and 71% of their growth since 2019 is real. While the $ are up for Supermarkets their 2023 real sales are down vs 2022 & 2021 and just barely positive vs 2019. Only 4.5% is real growth. Avg 19>23 Growth: Supermarkets: +6.0%, Real: +0.3%; Drug Stores: +4.1%, Real: +2.9%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are slightly up from January and positive in all other measurements. Their current inflation rate is 1.1% which is down sharply from 5.4% in 21>22. It was even higher in 20>21, +6.5%. However, 63% of their 52.5% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +11.1%; Real: +7.4%.
  • Gen Mdse Stores – Only $/Value Stores are up vs January, but actual sales were up for all channels vs 2022, 2021 & 2019. In real sales, the only negatives were in Ytd sales for Disc. Department Stores vs 22 & 21. They have the worst performance of any channel in all measurements and only 13% real growth since 2019. The other channels average 39%. Avg 19>23 Growth: SupCtr/Club: 6.7%, Real: 2.8%; $/Value Strs: +6.9%, Real: +3.0%; Disc. Dept.: +3.1%, Real: +0.4%
  • Office, Gift & Souvenir Stores – Sales are down from January. However, their sales growth since they started their recovery in the spring of 2021 has been strong enough to make them positive in all measurements vs 2022 & 2021. They are still really down vs 2019 but they are making progress. Avg Growth Rate: +1.7%, Real: -0.9%
  • Internet/Mail Order – Sales are down -6.4% from January but still a monthly record. They are positive for all other measurements, but their growth rate is only 51% of their average since 2019. However, 80% of their 99.2% growth since 2019 is real. Avg Growth Rate: +18.8%, Real: +15.8%. As expected, they are by far the growth leaders 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 then fell in Jan>Feb 2023. In fact, real sales are down vs February 2022, but all other measurements are positive. They are still the $ increase leaders vs 2021 and 75% of their 66.9% growth since 2019 is real. Average 19>23 Growth: +13.7%, Real: +10.8%. They remain 2nd in growth since 2019 to the internet. I’m sure that Pet Stores are contributing.

There is no doubt that high inflation is an important factor in Retail. In actual $, 10 channels reported increases in sales vs 2022 but 11 vs 2022. When you factor in inflation, the number with any “real” growth drops to 7 vs 2022 but 8 vs 2021 (in Jan it was only 4) This is a clear indication slowing inflation has lessened its impact at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ales for March.

Since 2019, we have seen the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $700B in a month for the first time and broke the $7T barrier in 2021. Relevant Retail was also strong as annual sales reached $4T in 2021 and all big groups set annual $ales records. In 2022 radical inflation was a big factor with the largest increase in 40 years. At first, this reduces the amount of product sold but not $ spent. Total Retail hit $8T and all groups again set new annual records in 2022. In 2023, sales fell for all groups in Jan>Feb then rose in March. Except for a dip by Gas Stations, all actual sales are positive. The biggest change is that real sales vs 21 are negative for all but Restaurants which shows the impact of cumulative inflation. BTW, Restaurants are positive in all measurements.

Overall – Inflation Reality March inflation vs 2022 fell below the $ increase rate for all but Relevant Retail. However, you see the impact of cumulative inflation as real sales are down for all but Restaurants vs 2021. Restaurants have the strongest performance in all measurements vs 2022, 2021 & 2019. The biggest negative is in Relative Retail. Monthly Real sales are down vs 2022 & 2021 and Ytd real sales are again down vs last year. Consumers pay more but buy less.

Total Retail – Every month since June 2020 has set a monthly sales record. December 2022 $ were $748.9B, a new all-time record. As expected, sales dipped in Jan>Feb then rose in March. Inflation is slowing but so is sales growth. Sales are up 3.1% vs last year. That’s the lowest rate since 3.0% in February 2021. Also, only 38% of the 19>23 growth is real but that’s better than 9%, 21>23. March sales are actually really down -4.5% vs 2021. Inflation is slowing but it 1st hit 4% in March 2021. We are starting to see the cumulative impact. Avg 2019>23 Growth: +8.5%, Real: +3.4%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They are the best performing big group in all measurements vs 22, 21 & 19. Inflation increased to 8.6% in March from 8.3% last month and is now 16.0% vs 21 and 20.3% vs 19. 47.5% of their growth since 19 is real but that is less than 59.6% of even greater growth since 21. Recovery started late but inflation started early. Avg 2019>23 Growth: +10.4%, Real: +5.4%. They just account for 13.7% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of 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 2022 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 2021>2022. This is bad but their real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 started off a little better but got worse in March. $ are up 0.4% vs 22 but are down vs 21. Ytd Real sales vs 2021 are also down. Their Ytd real sales vs 19 are still up but there is little improvement despite continued deflation. Avg 2019>23 Growth: +6.9%, Real: +1.1%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb then dropped 17% in Mar. However, prices are still +22.5% vs 21. The deflation actually caused monthly & Ytd sales vs 22 to drop but real sales are up. However, all real sales vs 21 & 19 are still down. Avg 2019>23 Growth: +8.0%, Real: -1.0%. The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a 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. However, their only down month was April 2020. They led the way in Total Retail’s recovery, which became widespread across the channels. Sales got on a roller coaster in 2022. However, all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, Jan>Feb had normal drops, but sales in March turned up. However, the increase was small so that real monthly sales & Ytd vs 22, along with monthly vs 21 were down. That means that real sales vs last year have been negative in 11 of the last 12 months. In fact, 50% of their 19>23 $ are real compared to only 4% for 21>23. Inflation is a cumulative problem that began in 2022. Their Avg 2019>23 Growth is: +8.6%, Real: +4.5%. The performance of this huge group is critically important. This is where America shops. The fact that real sales are down again is bad news.

Inflation is slowing slightly but the impact is still there. Sales increases are also slowing, and the fact that some real sales for Total & Relevant Retail have again turned negative is not a good sign. Restaurants are doing great while Auto & Gas Stations are still struggling despite ongoing deflation. However, the biggest concern is Relevant Retail. They may be moving back to Inflation Phase II, where Consumers spend more but the amount bought decreases. The sales increase rate is slowing even faster than inflation. This can lead to Phase III when sales actually drop. Let’s hope for a turnaround.

Here’s a more detailed look at March by Key Channels in the Stacked Bar Graph Format

  • Relevant Retail: Avg Growth Rate: +8.6%, Real: +4.5%. All 11 channels were up from February but only 7 were up vs 22 & 6 vs 21. Only 3 had a “real” increase vs 22 and/or 21. The negative impact of inflation is very visible in this real data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their $ are up from February and for all comparisons but vs March 21. However, their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +0.5%, Real: -2.1%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are up from February and in all other measurements. Their real sales are down vs March 22 & 21 and Ytd vs 21. 34% of their 27.1% 19>23 lift is real. This shows the impact of inflation. Avg 19>23 Growth: +6.2%, Real: +2.2%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are up from February and in all measurements vs 22, 21 & 19. However, inflation hit them hard. $ Real sales are down for all but Ytd vs 2019 and only 4.6% of the growth since 2019 is real. Avg Growth: +6.0%, Real: +0.3%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are up from February and in all other measurements vs 22, 21 & 19. Their inflation rate is low so 74% of their 21.7% growth from 2019 is real. Avg 2019>23 Growth: +5.0%, Real: +3.8%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales are up vs February but down vs 22. After 3 months of all positive measurements, real sales are down vs March 21 & Ytd vs 22. 66% of their 2019>23 growth is real. Avg 2019>23 Growth: +3.9%, Real:+2.6%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation has slowed but was very high in 2022. Sales are up from February & Ytd vs 22, 21 & 19 but down vs March 22 & 21. Their real sales are all down vs 22 & 21 and only 18% of their 19>23 growth is real. Avg 2019>23 Growth: +5.5%, Real: +1.1%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are up vs February but down in all other measurements. However, real sales are up Ytd vs 22, 21 & 19. This only happened because of strong deflation, -6.3>-7.9%. Avg 2019>23 Growth: -1.7%, Real: +0.08%.
  • 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. After 4 drops, Sales are up 25.5% from February. They are also up Ytd vs 21 & 19 but down in all other measurements. They have the highest Inflation of any channel so real sales are negative in all but Ytd vs 2019. Also, just 26% of their % sales growth since 2019 is real. Avg 2019>23 Growth is: +8.3%, Real: +2.4%.
  • 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. $ales are up from February and in all other measurements but vs Mar 21. Real sales are up except vs 21. This is not bad, but it comes after 2 months of all positives. Their inflation is lower than most groups so 71% of their 42% growth since 2019 is real. Avg 2019>23 Growth: +9.2%, Real: +6.8%.
  • 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 up from February and for all but real March 23 vs 22. They still have the biggest increase vs 2021 and vs 2019 they are 2nd only to NonStore. 70% of their 52% 19>23 growth and 59% of their 21>23 growth is real – amazing! Their Avg 19>23 Growth is: 11.0%, Real: 8.1%.
  • NonStore Retailers – 90% of their volume 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 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are up from February and all measurements are positive. 78% of their 91.8% growth since 2019 is real. Their Avg Growth: +17.7%, Real: +14.5%.

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, and in most product categories it has slowed in Jul>Mar which should improve the Retail Situation. Sales were up from February for all channels but Gas Stations. Inflation continues to slow in most channels, which increases Real Sales – the amount of products sold. Some channels like Auto, Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling but a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed and is now below the lower inflation rate. This has produced negative real sales for most channels. This is evident in the Relevant Retail group as Real sales vs last year have again turned negative. However, it is also true for 8 of 11 smaller channels. After a brief respite, we may be moving back to Inflation, Phase II, increased $ales but a decrease in the amount sold. Hopefully, we can avoid Phase III, when $ales also decrease.

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 from 2021 to 2023 to show cumulative inflation.

Monthly 22>23 CPI changes of 0.2% or more are highlighted. (Green = lower; Pink = higher)

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

Retail Channel Monthly $ Update – January Final & February Advance

By 2021, the market had generally recovered from the impact of the pandemic. In 2022, we were hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for January and then go to the Advance Report for February. Our focus is comparing to last year but also 2021 and 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The data will be presented in detailed charts to facilitate visual comparison between groups/channels. Starting with February, the charts will show 11 separate measurements so we switched to a stacked bar format for the channel chart.

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019. Note: January Monthly & Ytd are obviously the same. We will include actual and Real data for Jan 2023 vs 2019 for this report.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the January Final. All were down from last month, but all were up vs January of 22, 21 & 19. Considering inflation, only Relevant Retail was really down for the month vs 2022. Vs 2021 & 2019 the real data for the big groups associated with cars was not good. Here are the specifics for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The January Final is $8.2B more than the Advance. Restaurants had the only negative: -$0.5B; Gas Stations: N/C; Auto: +1.3B; Relevant Retail: +$7.3B. Sales are down from December as expected but consumers continue to spend more vs last year. At least for the 1st month, the Real numbers vs 2022 are positive except for a slight dip by Relevant Retail. Auto & Gas Stations are still really down vs 2021 and Gas Stations sold less product than they did in 2019. The inflation impact on Relevant Retail is concerning. Their Real $ales vs the prior year have now been negative for 10 straight months. They have also fallen behind Restaurants to 2nd place in performance since 2019 but 58.6% of their growth is Real.

Now, let’s see how some Key Pet Relevant channels did in January

Overall– All were down from December but up vs 2022. Only 3 were really down. Vs 2021, all had increases but only 4 were real – the impact of cumulative inflation. Vs 2019, Office/Gift/Souvenir & Supermarkets were only real negatives.

  • Building Material Stores – The pandemic caused consumers to focus on their homes which has produced sales growth of 31.1% since 2019. Home Ctr/Hdwe has the most growth since 2021 but Farm stores are the leaders vs 2022 & 2019. Prices for the Bldg/Matl group have inflated 21.4% since 2021 which has produced a lot of negative real numbers. Importantly, only 22.8% of their 19>23 lift was real. It was only this high because half of the lift came from 20>21, prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 6.8%, Real: 1.5%; Farm: 8.2%, Real: 3.2%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Stores are positive in all numbers vs 22, 21 & 19 and 75% of their growth since 2019 is real. While the $ are up for Supermarkets their 2023 real sales are down vs 2022, 2021 and now 2019. Avg 19>23 Growth: Supermarkets: +5.5%, Real: -0.2%; Drug Stores: +4.0%, Real: +3.0%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down 44.9% from December but up vs 2022, 2021 & 2019. Their current inflation rate is 1.5% which is down sharply from 5.4% in 21>22. It was even higher in 20>21, +6.5%. However, 75% of their 55.2% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +11.6%; Real: +9.0%.
  • Gen Mdse Stores – All channels were down from December but up vs 2022, 2021 & 2019. $/Value store are the only channel really up vs 2022. Vs 2021 all channels are really down. As expected, Disc. Dept Stores have the worst performance of any channel in all measurements. The other channels have 47% real growth since 2019. Avg 19>23 Growth Rate: SupCtr/Club: 6.8%, Real: 3.4%; $/Value Strs: +6.2%, Real: +2.8%; Disc. Dept.: +3.7%, Real: +1.3%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are down 37.2% from December but their sales growth has been strong enough to make them positive in all measurements vs 2022 & 2021. They are still really down vs 2019 but they are making progress. Avg Growth Rate: +1.3%, Real: -1.2%
  • Internet/Mail Order – Sales are down 21.2% from December but still a monthly record. They are positive for all other measurements, but their growth rate is only 53% of their average since 2019. However, 90% of their 99.7% growth since 2019 is real. Avg Growth Rates: +18.9%, Real: +17.3%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level in 2021 as annual sales reached $100B for the first time. In 2022 their sales dipped in January, July, Sept>Nov, rose in December and then fell 21% in January. All other measurements are very positive, and they are still the $ increase leaders vs 2021. Plus, 85% of their 68.1% growth since 2019 is real. Average 19>23 Growth: +13.9%, Real: +12.1%. They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, all 11 channels reported increases in sales vs 2022 & 2021. When you factor in inflation, the number with any “real” growth falls to 8 vs 2022 but only 4 vs 2021. This is a clear indication of the ongoing strong impact of cumulative inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ales for February.

We have had memorable times since 2019, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $700B in a month for the first time and broke the $7T barrier in 2021. Relevant Retail was also strong as annual sales reached $4T in 2021 and all big groups set annual $ales records. In 2022 radical inflation was a big factor with the largest increase in 40 years. At first, this reduces the amount of product sold but not $ spent. Total Retail hit $8T and all groups again set new annual records in 2022. As expected, sales fell for all groups in January and now February. The only other February negatives are from Auto or Gas Stations. This comes despite actual price deflation in both. The other big groups and Total Retail are positive in all measurements vs 2022, 2021 & 2019.

Overall – Inflation Reality February inflation vs 2022 fell below the $ increase rate for all but Gas stations. However, you see the impact of cumulative inflation as real sales are down for Gas Stations and Auto vs 2021. Restaurants have the strongest performance in all measurements vs 2022, 2021 & 2019. There is another positive. Although the increase was small, real Ytd sales vs last year are finally up for both Total & Relevant Retail.

Total Retail – Every month since June 2020 has set a monthly sales record. December 2022 $ were $748.9B, a new all-time record. As expected, sales dipped in January & February. February is usually the low point for retail sales, but all measurements are positive vs 2022, 2021 & 2019. Inflation is slowing but so is sales growth. Sales are up 5.6% vs last year. That’s the lowest rate since 3.0% in February 2021. Also, only 46% of the 19>23 growth is real but that’s better than 26%, 21>23. Avg 2019>23 Growth: +8.6%, Real: +4.2%. Inflation slows but continues to have a cumulative impact.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They have the best performance of any big group in all measurements vs 2022, 2021 & 2019. Inflation increased to 8.3% for February from 8.1% last month and is now 15.5% vs 2021 and 20.0% vs 2019 but 59.8% of their 49.7% growth since 2019 is real. Avg 2019>23 Growth: +10.6%, Real: +6.7%. They only account for 13.6% of Total Retail $ales, but their performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of 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 2022 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 2021>2022. This is bad but their real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 has started off a little better. Sales are up vs 2022, 2021 & 2019. Plus, real sales are only down vs 2021. After 8 negative months, Jan>Feb real Ytd Sales vs 2019 are positive. Prices have now deflated for 3 straight months. Avg 2019>23 Growth: +7.2%, Real: +1.7%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices deflated in December & February. However, it is still +35.7% vs 2021. Monthly sales vs the previous year actually decreased in February for the 1st time in 2 years. Real sales are even worse. Monthly, they are down vs 2022 & 2021 and Ytd they are down vs 2021 & 2019. Avg 2019>23 Growth: +8.6%, Real: -1.8%. The numbers show the cumulative impact of inflation. In 2023 consumers paid 39% more to buy 7% less gas than in 2019.

Relevant Retail – Less Auto, Gas and Restaurants – This group accounts for 60+% of Total Retail $. It has a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020. They have led the way in Total Retail’s recovery, which became widespread across the channels. Sales went on an up/down roller coaster in 2022. However, all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023 Jan>Feb had normal drops, but sales in February set a record and were up in all measurements vs 2022, 2021 & 2019. After 10 straight negative months, real sales vs last year have now turned positive. In fact, 58% of their 19>23 $ are real compared to only 23% for 21>23. This shows that inflation is a cumulative problem that began in 2022. Their Avg 2019>23 Growth: +8.6%, Real: +5.2%. The performance of this huge group is critically important. This is where America shops. The fact that real sales are now positive is great news.

Inflation is slowing slightly but the impact is still there. Sales increases are also slowing, but the fact that real sales for Total & Relevant Retail are finally both slightly positive is a good sign. The biggest concern is with Auto & Gas Stations. Their extreme inflation is now deflating but they are struggling. Restaurants were hit hard by the pandemic, but they are now by far the best performers. For Relevant Retail, we may be moving back to Inflation Phase I, where Consumer spending grows but the amount bought still increases – just at a lower rate. Let’s hope that inflation continues to slow.

Here’s a more detailed look at February by Key Channels in the Stacked Bar Graph Format

  • Relevant Retail: Avg Growth Rate: +8.6%, Real: +5.2%. 9 of 11 channels were down from January but 10 were up vs 2022 & 2021. 7 were really up vs 2022 & 8 vs 2021. The negative impact of inflation is less but still there in the real data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their $ are up from January and for the month & Ytd vs 2022 & 2021 & 2019. However, their real sales are down vs February 2022 & Ytd vs 2022 & 2019. Avg 2019>23 Growth: +0.9%, Real: -1.9%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Sales are down from January but up in all other measurements. 45% of their 29.3% 19>23 lift is real, but that’s much better than the 6% from 21>23. This shows the impact of inflation. Avg 19>23 Growth: +6.6%, Real: +3.2%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are down from January but up vs 22, 21 & 19. However, inflation hit them hard. $ Real sales are down for all but Ytd vs 2019 and only 4% of the growth since 2019 is real. Avg Growth: +5.9%, Real: +0.2%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from January but are up in all other measurements vs 22, 21 & 19. Their inflation rate is low so 77% of their 19.8% growth from 2019 is real. Avg 2019>23 Growth: +4.6%, Real: +3.6%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales grew after the big drop in January and for the 3rd straight month all other all measurements are positive. 75% of their 2019>23 growth is real. Avg 2019>23 Growth: +4.5%, Real:+3.5%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation has slowed but was very high in 2022. Sales are down from January but up vs 22, 21 & 19. However, their monthly real sales are down vs 22 & 21 and Ytd vs 21. Only 25% of their 19>23 growth is real. Avg 2019>23 Growth: +5.7%, Real: +1.5%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are down in all measurements except vs February 2021. However, all real sales are up. This only happened because of strong deflation, -6>8%. Avg 2019>23 Growth: -1.6%, Real: +0.06%.
  • 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. Sales fell Nov>Feb but are still up vs 22, 21 & 19. Inflation actually increased to 11.8% from 9.6% in January. Real sales are negative in all measurements but Ytd vs 2019. Also, only 30% of their Ytd 35.2% sales growth since 2019 is real. In December 2022, it was 54%. Their Avg 2019>23 Growth is: +7.8%, Real: +2.5%.
  • 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. February $ are down from January but they are positive in all other measurements for the 2nd straight month. Inflation in this group is lower than most groups and most comes from Sporting Goods. 78% of their 41.4% growth since 2019 is real. Avg 2019>23 Growth: +9.0%, Real: +7.2%.
  • 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 down from January but up for all other measurements. They still have the biggest increase vs 2021 and vs 2019 they are 2nd only to NonStore. 79% of their 50.8% growth since 2019 is real, which is also 2nd to Nonstore. Their Avg 19>23 Growth is: 10.8%, Real: 8.8%.
  • NonStore Retailers – 90% of their volume 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 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are down from January but all other measurements are up. 87% of their 88.5% increase since 2019 is real. Their Avg Growth: +17.2%, Real: +15.4%.

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, and in most product categories it has slowed in Jul>Feb which brought a significant improvement to the Retail Situation. Sales were down from January for almost all channels, but this is no surprise as February is often the sales low point of the year.  Inflation continues to slow in most channels, which increased Real Sales – the amount of products sold. Some channels like Auto, Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling but most other channels are showing a marked improvement. This is evident in the Relevant Retail group as Ytd Real sales vs last year turned positive after 10 straight negative months. In fact, all their measurements vs 2022, 2021 & 2019 were up. This pattern was duplicated by 6 of 11 major retail channels. Inflation is still high and the rate of sales increase is lower but we may be turning the corner in our struggle against the pricing tsunami that has hit the U.S. Retail Market.

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. We have expanded the data to include the CPI changes from 2021 to 2023 to show cumulative inflation.

Monthly 22>23 CPI changes of 0.2% or more are highlighted. (Green = lower; Pink = higher)

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

 

Retail Channel Monthly $ Update – December Final & January Advance

By 2021, the market had generally recovered from the impact of the pandemic. In 2022, we were hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for December and then go to the Advance Report for January. Our focus is comparing to last year but also 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month a year ago
    • Current Month Real change – % vs same month in a year ago factoring in inflation
  • Current Annual change – % & $ for 2022 vs 2021. January 2023 will be compared to 2022 & 2021
    • Current Annual Real change % for 2022 vs 2021. January 2023 will show real change vs 2022 & 2021
  • Current Annual change 2022 vs 2019 – % & $. January 2023 will also be compared to January 2019.
    • Current Annual Real change 2022 vs 2019 – % factoring in inflation. Real Change also for January 2023 vs 2019.
  • Monthly & Annual $ & CPIs which are targeted by channel will also be shown. (Details are at the end of the report)

First, the December Final. All but Gas Stations were up from last month and all were up for December & Y/E vs 2021. Considering inflation, only Relevant Retail was down for the month but for year-end numbers, only Restaurants were up. Here is the December data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The December Final is $1.2B less than the Advance. Restaurants had the only positive: +$1.2B; : Auto: -1.2B; Gas Stations: -$0.3B; Relevant Retail: -$0.8B. Sales are up from last month and consumers continue to spend more vs 2021. However, the “real” numbers vs 2021 tell a slightly different story. All but Relevant Retail are really up for the month but only Restaurants are really up year-end vs 2021. Auto & Gas Stations also finished 2022 really down vs 2019. The inflation impact on Relevant Retail is concerning. Their Real YTD $ales vs 2021 were negative for 9 straight months and they finished -$1.2%. They do have the best performance since 2019 as 59.7% of their 31.8% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in December

Overall– 10 of 11 were up from November. Vs Dec 2021, 9 reported more $ but only 2 were really up. In Y/E vs 2021, 10 had increases but only 3 were real. Vs 2019, Disc Dept Stores are again the only real negative. In Sep/Oct all were up.

  • Building Material Stores – Sales are down vs Nov for Home Ctr/Hdwe, but up 6.6% Y/E vs 21. Farm stores are +5.4% vs Nov but +7.5% vs Dec 2021. Y/E sales are +6.1%. The Bldg/Matl group had a Y/E (annual) inflation rate of 10.9% which has produced negative real numbers. The pandemic caused consumers to focus on their homes which has produced sales growth of 36.5% since 2019. Importantly, 54% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.8%, Real: 6.0%; Farm: 12.3%, Real: 7.7%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The Y/E rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are up from November but really negative vs 2021. However, 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & Y/E. Also, only 14% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +7.0%, Real: +1.0%; Drug Stores: +4.9%, Real: +4.4%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 39.8% from November and up vs 2021. Y/E sales are 1.7% above 2021. Their current inflation rate is 3.5% which is down from 7.5% in April but Y/E it is 5.4%. It was even higher in 20>21, +6.5%. However, 72% of their 48% lift since 2019 is real. Their Avg Growth Rate was: +14.0%; Real: +10.4%.
  • Gen Mdse Stores – All channels were up from November and only Discount Dept Stores were down for the month and Y/E vs 2021. All real numbers for all channels monthly and Y/E vs 2021 are negative. Disc. Dept Stores were hurting before COVID and their Y/E sales are “really” down vs 2019. The other channels have 36% real growth. Avg Growth Rate: SupCtr/Club: 5.9%, Real: 2.0%; $/Value Strs: +7.9%, Real: +4.2%; Disc. Dept.: +2.3%, Real: -0.5%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up 41% from November and their 2022 sales growth has been strong enough to make them positive in all measurements vs 2021 & 2019. They have made remarkable progress. Avg Growth Rate: +3.5%, Real: +0.8%
  • Internet/Mail Order – Sales are up 7.2% from November and set a new all-time record. They are positive for all other measurements, but their Y/E growth rate is only 55% of their average since 2019. However, 89% of their 75.8% growth since 2019 is real. Avg Growth Rates: +20.7%, Real: +18.7%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level in 2021 as annual sales reached $100B for the first time. Their sales dipped in January, July, Sept>Nov, then rose in December but were really down vs Dec 21. 2022. Y/E measurements are very positive and they are by far the $ increase leaders over 2021. Plus, 85% of their 55.5% growth since 2019 is real. Average Growth Rate is: +15.8%, Real: +13.7%. They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, 9 channels reported increases in monthly $ and 10 in Y/E $ over 2021. When you factor in inflation, the number with any “real” growth falls to 2 for monthly & 3 for Y/E. This is a clear indication of the ongoing strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ales for January.

We have had memorable times since 2019, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $700B in a month for the first time and broke the $7T barrier in 2021. Relevant Retail was also strong as annual sales reached $4T in 2021 and all big groups set annual $ales records. In 2022 radical inflation was a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. Total Retail hit $8T and all groups again set new annual records in 2022. As expected, all groups were down from December, but all were up vs January 2022. Plus, in the amount of product sold, only Relevant Retail was down vs 2022 but Auto & Gas Stations were down vs 2021. Gas Stations are also still really down vs 2019.

Overall – Inflation Reality January inflation vs 2022 fell below the $ increase rate for all but Relevant Retail. However, you see the impact of 2022 inflation as real sales are down for Gas Stations and Auto vs 2021 and only minimally up for Relevant & Total Retail. Restaurants were down vs Dec, but up strongly in all measurements vs 2022, 2021 & 2019. There is a slight positive. For the 1st time in 9 months real sales vs 2021 are up vs 2021 for Total & Relevant Retail.

Total Retail – Every month since June 2020 has set a monthly sales record. December 2022 $ were $748.2B, a new all-time record. 2022 was somewhat normal as sales dipped in September then grew in Oct>Dec before falling in January. January $ are -16.2% vs December, +6.2%% vs Jan 2022, +21.0% vs 2021 & +37.6% vs 2019. However, when you factor in inflation, only 43% of 19>23 sales growth is real but that’s better than 22>23: 33% and 21>23: 17%. Avg 2019>23 Growth: +8.3%, Real: +3.8%. Even as inflation slows, it continues to have a cumulative impact.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. However, they reached a record $876B in 2021. Sales continued to grow in 2022, setting an all-time monthly record of $90.8B in October and exceeding $1T in 2022 for the 1st time. They are the only big group that is positive in all measurements vs 2022, 2021 & 2019. Inflation slowed to 8.1% for January from 8.2% last month. However, it is still 14.9% vs 2021 and 19.6% vs 2019. 62.8% of their 52.8% growth since 2019 is real. Avg 2019>23 Growth: +11.2%, Real: +7.4%. They only account for 13.8% of Total Retail $ales, but their performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, then flipping monthly with January being down. They had 4 down months in actual sales which are the only reported sales negatives by any big group in 2021>2022. This is bad but their real Y/E sales numbers were much worse, down -8.2% vs 2021, the worst of any group. 2023 has started off a little better. Sales are up vs 2022, 2021 & 2019. Plus, real sales are only down vs 2021. Avg 2019>23 Growth: +7.3%, Real: +1.7%. Prices have deflated for 2 straight months. Real Sales vs 2019 are positive for the 1st time since April 2022.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and reached a record $584B in 2022. Sales got on a rollercoaster in 2022 but have trended down Nov>Jan. They have fallen to 2nd place behind restaurants with the biggest increases vs 2022, 2021 and 2019 but it is still not reality. Gasoline inflation has slowed. However, it is still 42.7% vs 2021. Monthly real sales are again positive, but sales are still really down -3.2% vs 2021 and -5.4% vs 2019. Avg 2019>23 Growth: +9.0%, Real: -1.4%. The numbers show the cumulative impact of inflation. Consumers spend more but buy less, even less than they bought 4 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This group accounts for 60+% of Total Retail $. It has a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales went on an up/down roller coaster in 2022. However, all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. January had its normal drop, but real sales were also down vs 2022 and only 7% of the 21>23 growth is real. From 2019>23 sales grew 35.6% and 55% was real. This shows that inflation is a cumulative problem that began in 2022. Their Avg 2019>23 Growth: +7.9%, Real: +4.6%. The performance of this huge group is critically important. This is where America shops. Real sales are down 2.1% so consumers bought less than in 2022. They just paid more. That’s not good.

Inflation is slowing slightly but the cumulative impact is still there. Relevant Retail is now really down vs last year for 11 straight months. All other groups are up. However, when you check the real growth vs 2021, Auto & Gas Stations are still “really down” and Total & Relevant Retail have negligible real growth. Restaurants are by far the best performers. For Relevant Retail, we are still in Inflation Phase II. Consumer spending grows but the amount bought declines. Let’s hope that we can continue to avoid Phase III, when consumer spending drops.

Here’s a more detailed look at January by Key Channels

  • Relevant Retail: Avg Growth Rate: +7.9%, Real: +4.6%. All 11 channels were down from December but 10 were up vs 2022 & 2021. 7 were really up vs 2022 & 6 vs 2021. The negative impact of inflation is less but still there in the real data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. They are down 47% from December but up vs January 2022 & 2021 & 2019. However, they are really down vs 2022 & 2019. Avg 2019>23 Growth: +1.1%, Real: -1.4%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is still a big factor in their numbers. Sales are down from December but up vs 22 & 21. Their real sales are all down vs 22 & 21 and only 38% of their 25.4% lift from 2019 is real. Avg 19>23 Growth: +5.8%, Real: +2.3%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are down from December. The increases vs 22 & 21 are strong, but inflation is stronger. Real sales are down for both and only 2.4% of the growth since 2019 is real. Avg Growth: +5.8%, Real: +0.2%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from December but are up in all other measurements vs 22, 21 & 19. Their inflation rate is low so 76% of their 17.7% growth from 2019 is real. Avg 2019>23 Growth: +4.2%, Real: +3.2%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 21 with strong growth through 22, especially December. January sales fell -52.5% but for the 2nd straight month all other all measurements are positive. 76% of their 2019>23 growth is real. Avg 2019>23 Growth: +4.4%, Real:+3.4%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation has slowed but was very high in 2022. Sales are down from December but up vs 22, 21 & 19. However, their real numbers are still down vs 2021 and only 18% of their growth since 2019 is real. Avg 2019>23 Growth: +5.3%, Real: +1.0%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are down in all measurements but real sales vs 2022. This only happened because of an 8.0% deflation rate from 22>23. Avg 2019>23 Growth: -3.3%, Real: -1.6%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. The 2022 spring lift ended in May. Sales fell in Nov>Jan after a slight lift in October. Sales are up vs 22, 21 & 19, but when you factor in double-digit inflation, the real amount sold is down vs 22 & 21. Also, only 22% of their strong 30.5% sales growth since 2019 is real. In December 2022, it was 54%. Their Avg 2019>23 Growth is: +6.9%, Real: +1.6%.
  • 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. January $ fell -42.4% from December but are now positive in all other measurements. Inflation in this group is lower than most groups and most comes from Sporting Goods. 77% of their 39.0% growth since 2019 is real. Avg 2019>23 Growth: +8.6%, Real: +6.8%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21 and have continued to grow. Sales are -18.6% from December but up for all other measurements. In 2022 they had the biggest increase vs 2021 and vs 2019 they were 2nd only to NonStore. In 2023 they are 3rd vs 2022 but 77% of their 45.2% growth since 2019 is real. Their Avg Growth is: +9.8%, Real: +7.8%.
  • NonStore Retailers – 90% of their volume 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 1st time and they broke the $1 Trillion barrier for the year. Their growth slowed significantly in 2022 and now 2023 but all measurements vs 22, 21 & 19 are positive. 87% of their 81.2% increase since 2019 is real. Their Avg Growth: +16.0%, Real: +14.3%.

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, and in most product categories it has slowed in Jul>Jan. On the surface, the Retail impact is almost invisible. Sales in the total market and in the Relevant Retail group set new records in 2022 but the growth rate slowed and the amount purchased fell, Phase II of strong inflation. December was again the peak of the Holiday Shopping season and monthly sales. As expected, sales fell across the board in January. Except for Relevant Retail the amount of product sold by the big groups in January was more than in 2022. This was not widespread among the individual retail channels. It was largely due to the biggest channels – Grocery, General Merchandise and Bldg/Hdwe/Farm. While inflation has slowed in most product categories, it is still very high for Food at Home and Tools/Hdwe. This had a big impact on real sales in specific channels and Relevant Retail, which has now been “really” negative vs last year for 11 straight months. Will this continue?

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.

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

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

Retail Channel Monthly $ Update – November Final & December Advance

By 2021, the market had generally recovered from the impact of the pandemic. In 2022, we are being hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for November and then go to the Advance Report for December. Our focus is comparing 2022 to 2021 but also YTD 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2021
    • Current Month Real change – % vs same month in 2021 factoring in inflation
  • Current YTD change – % & $ vs 2021
    • Current YTD Real change – % vs 2021 factoring in inflation
  • Current YTD change vs 2019 – % & $
    • Current Real change YTD vs 2019 – % factoring in inflation
  • Monthly & YTD $ & CPIs which are targeted by channel will also be shown. (CPI details are at the end of the report)

First, the November Final. Only Relevant Retail and Total were up from last month but all were up for November & YTD vs 2021. However, considering inflation, only Restaurants and Gas Stations were up for the month and YTD, only Restaurants were up. Here is the November data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The November Final is $1.8B less than the Advance. Relevant Retail had the only positive: +$0.3B; Restaurants: -0.8B; Auto: No Change; Gas Stations: -$1.3B. Sales are up from last month and consumers continue to spend more vs 2021. However, the “real” numbers vs 2021 tell a slightly different story. Only Restaurants and Gas Stations are really up for the month but again only Restaurants are really up in YTD $. Auto & Gas Stations also remain really down YTD vs 2019. The inflation impact on Relevant Retail is significant and concerning. Their Real YTD $ales vs 2021 have been negative for 8 straight months. They do have the best performance since 2019 as 60.9% of their 32.2% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in November

Overall – 6 of 11 were up from October. Vs Nov 2021, 9 reported more $ but only 3 were really up. In YTD vs 2021, 10 reported increases but only 4 were real. Vs 2019, Discount Dept Stores are the only “real” negative. In Sep & Oct all were up.

  • Building Material Stores – Sales are down vs Oct for Home Ctr/Hdwe, but up 7.2% YTD vs 21. Farm stores are -8.5% vs Oct but +11.7% vs Nov 2021. YTD sales are +6.0%. The Bldg/Matl group has a YTD inflation rate of 10.9% which has produced negative real numbers. The pandemic caused consumers to focus on their homes which has produced sales growth of 36.6% since 2019. Importantly, 55% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.8%, Real: 6.2%; Farm: 12.2, Real: 7.7%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The YTD rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are down from October but positive in all other measurements and 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & YTD. Also, only 14% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.8%, Real: +1.0%; Drug Stores: +4.9%, Real: +4.3%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 6.2% from October but down vs 2021. YTD sales are still 1.5% above 2021. Their current inflation rate is 2.7% which is down from 7.5% in April but YTD it is still 5.4%. It was even higher in 20>21, +6.5%. However, 72% of their 48% lift since 2019 is real. Their Avg Growth Rate was: +14.0%; Real: +10.4%.
  • Gen Mdse Stores – All channels were up from October and only Discount Dept Stores were down for the month and YTD vs 2021. All real numbers for all channels monthly and YTD vs 2021 are negative. Disc. Dept Stores were hurting before COVID and their YTD sales are again “really” down vs 2019. The other channels have 37% real growth. Avg Growth Rate: SupCtr/Club: 5.9%, Real: 2.1%; $/Value Strs: +7.8%, Real: +4.2%; Disc. Dept.: +2.6%, Real: -0.1%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are down 30% from October and Real Sales are down vs November 2021 but their 2022 sales growth has been strong enough to make them positive in all other measurements vs 2021 & 2019. They have made remarkable progress. Avg Growth Rate: +3.3%, Real: +0.6%
  • Internet/Mail Order – Sales are up 18% from October and set a new monthly record. They are positive for all other measurements, but their YTD growth rate is only half of their average since 2019. However, 89% of their 78.9% growth since 2019 is real. Avg Growth Rates: +21.4%, Real: +19.4%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level by December 2021 as annual sales reached $100B for the first time. Their sales dipped in January, July, Sept>Nov but all measurements have been positive for every other month. In 2022, they are by far the Sales increase leaders over 2021. Plus, 85% of their 56.4% growth since 2019 is real. Average Growth Rate is: +16.7%, Real: +14.6%. They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, 9 channels reported increases in monthly $ and 10 in YTD $ over 2021. When you factor in inflation, the number with any “real” growth falls to 3 for monthly & 4 for YTD. This is a clear indication of the ongoing strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ales for December.

We have had memorable times since 2019. Some big negatives, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $600B in a month for the first time and broke the $7 Trillion barrier in 2021.  Relevant Retail was also strong as annual sales reached $4T and all big groups set annual $ales records in 2021. In 2022 radical inflation is a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. Only Gas Stations were down from Nov, but all groups were up vs December & YTD 2021. However, in the amount of product sold: Monthly: Only Relevant Retail was down. YTD: All were down but Restaurants.

Overall – Inflation Reality December inflation vs 2021 fell below the $ increase rate. Gas Stations were down vs Nov, but all are up for the month and YTD vs 2021. When you factor inflation into the data, all but Relevant Retail are really up for the month vs 2021. However, the real YTD sales vs 2021 are down for all but Restaurants for the 9th straight month.

Total Retail – Every month in 2022 has set a monthly sales record. December $ are $749.4B, a new all-time record. 2022 has become somewhat normal as sales dipped in September then grew in Oct>Dec. December $ are +7.8% vs November, +5.3% vs December 2021 and +9.2% vs YTD 2021. However, when you factor in inflation, monthly sales are up +0.5% but YTD sales are down for the 10th consecutive month. Plus, only 39% of the 31.5% growth since 2019 is real. Avg Growth Rate: +9.6%, Real: +3.9%. Even as inflation slows, it continues to have an impact.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. Sales in the last 9 months of 2021 exceeded $70B and 2021 was the biggest year in history, $876B. January sales fell from December but then turned up, setting new all-time monthly records in March>May. $ fell in June, set a new record in July and then fell again in Aug>Sep. October sales hit $90B for the 1st time, fell in November, then rose in December. They are the only big group that is positive in all measurements vs 2021 & 2019. Inflation slowed to 8.2% for December from 8.4% last month. However, it remains 7.5% YTD. 55.2% of their 32.4% growth since 2019 is real. Avg Growth Rate: +9.8%, Real: +5.6%. They only account for 12.7% of Total Retail $ales, but their performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, then flipping monthly with December being up. They have 4 down months in actual sales which are the only reported sales negatives by any big group vs 2021. This is bad but their real YTD sales numbers are much worse. Extremely high inflation has pushed their real YTD sales down -8.1% vs 2021, the worst of any group. Plus, their 23.8% growth since 2019 is really down -7.7%. Avg Growth: +7.3%, Real: -2.6%. Inflation slowed for 6 months then prices deflated in December. The 4 drops in $ales were tied to high inflation.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and obviously need less gas. This group started recovery in March 2021 and reached a record $584B for the year. Sales fell Jan>Feb, turned up Mar>Jun, fell in Jul>Sep, up in Oct then down in Nov>Dec. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation slowed then deflated -0.9% in December. However, it is 32.1% YTD. Monthly real sales are again positive, but YTD sales are still really down -2.2% vs 2021 and -2.5% vs 2019. Avg Growth Rate: +13.9%, Real: -0.9%. The YTD numbers show a big impact of inflation. Consumers spend more but buy less, even less than they bought 3 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This the “core” of U.S. retail and accounts for 60+% of Total Retail $. This group has a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales fell in Jan>Feb, went on an up/down roller coaster from Mar>Oct, then grew in Nov & Dec. All months in 2022 set new records with a new all-time high in December, $482B, and an annual record of $4.81T. However, their YTD increase is 28% below their 9.6% avg growth since 2019. Now, we’ll look at the impact of inflation. 59.7% of their 31.8% growth since 2019 is real. However, real sales vs 2021 are down -2.3% for the month and -1.2% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.6%, Real: +6.0%. The performance of this huge group is critically important. This is where America shops. Real annual sales are down 1+% so consumers bought less than in 2021. They just paid more. That’s not good.

Inflation is slowing slightly but the impact is still there. All groups but Restaurants have no YTD (annual) real growth vs 2021 and Auto & Gas Stations are still “really down” vs YTD 2019. We’ve now had 10 straight months of real YTD drops for Total Retail and 9 straight for Relevant Retail. We are still in Inflation Phase II. Consumer spending grows but the amount bought declines. Inflation slowed markedly for Auto & Gas Stations and prices even deflated in December, so they have avoided Phase III, when consumer spending drops. We hope that this pattern is repeated in Relevant Retail.

Here’s a more detailed look at December by Key Channels

  • Relevant Retail: Avg Growth Rate: +9.6%, Real: +6.0%. 9 of 11 channels were up from November and 8 were up vs December 2021, but 10 were up YTD vs 2021. The negative impact of inflation is less but still there in the “real” data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. They are up 33% from November but down vs December 2021. Their YTD actual $ are down vs 2019. They were positive Apr>Nov. They are still “really” down in all measurements vs both 2019 & 2021. Avg Growth: -0.1%, Real: -3.1%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is a big factor in their current numbers. Sales are up from November and vs 2021. Their real numbers are all down vs 2021 and only 36.2% of their 19.6% lift from 2019 is real. Avg Growth: +6.2%, Real: +2.3%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are up from November. The increases vs 2021 are strong but inflation is stronger. Real sales are down and only 13.1% of the growth since 2019 is real. Avg Growth: +6.9%, Real: +1.0%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are up from November but are really down vs Dec 2021. All other measurements vs 2019 & 2021 are positive. Their inflation rate is low so 89% of their 16.4% growth from 2019 is real. Avg Growth: +5.2%, Real: +4.6%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 2021 with strong growth through May 2022. December sales are +41% from November and +3.5% from 21. For the 1st time in 2022, all measurements are positive. 84% of their 2019>22 growth is real. Avg Growth: +5.0%, Real:+4.3%
  • Home Furnishings – Sales dipped Mar>May in 2020. Then as consumers’ focus turned to their homes, furniture became a priority. Inflation has been high. Monthly Sales are -0.7% vs 2021 and only up 1.0% YTD. All of their real numbers vs 2021 are very negative. Only 11.1% of their growth since 2019 is real. Avg Growth: +5.9%, Real: +0.7%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are up +14.6% from November but down vs 2021. Deflation pushed their real December sales up +1.8%. Their sales are even down vs 2019 – both actual and real. Avg Growth: -1.0%, Real: -0.15%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift ended in May. Sales fell in Nov>Dec after a slight lift in October. Monthly & YTD sales are up vs 2021, but when you factor in double-digit inflation, the real amount sold is down for both measurements. However, 54.0% of their strong 36.5% sales growth since 2019 is real. Their Avg Growth is: +10.9%, Real: +6.2%.
  • 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. December $ jumped +30.4% from November and are ahead of 2021, monthly & YTD. However, real YTD $ are still down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 78.7% of their 39.0% growth since 2019 is real. Avg Growth: +11.6%, Real: +9.3%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21 and have continued to grow. December sales are +5.2% from November and up vs 2021. Since April they have held the top spot in YTD increase vs 2021. Their YTD growth since 2019 is 2nd only to NonStore and 80% of the 42.2% growth since 2019 is real. Their Avg Growth is: +16.1%, Real: +13.9%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their YTD Growth has slowed significantly in 2022 but all measurements are positive. 87.2% of their 71.1% increase since 2019 is real. Their Avg Growth is: +19.6%, Real: +17.5%.

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, a new challenge came to the forefront – extreme inflation, the worst in 40 years. Overall, and in most product categories it has slowed in Jul>Dec. On the surface, the Retail impact is almost invisible. Sales in the total market and in the Relevant Retail group continue to grow but the growth rate has markedly slowed compared to last year. Overall, the retail market is generally in phase II of strong inflation – spending grows but the amount purchased falls. December is the traditional peak of the Holiday Shopping season and monthly sales. “How did it go?” The channels most impacted are – Clothing, General Merchandise, Electronics, Nonstore, Sporting Gds and Miscellaneous. These channels produced 63% of Relevant Retail December $ but 82% of the increase from November & the lift from 2021. They were up 6.6% from 2021 and real sales were +2.3%, much better than -2.3% for Relevant Retail. The December lift was smaller than we hoped for, but it still happened. BTW – 59% of the increase came from Nonstore.

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.

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

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

Retail Channel Monthly $ Update – October Final & November Advance

By 2021, the market had generally recovered from the impact of the pandemic. In 2022, we are being hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for October and then go to the Advance Report for November. Our focus is comparing 2022 to 2021 but also YTD 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2021
    • Current Month Real change – % vs same month in 2021 factoring in inflation
  • Current YTD change – % & $ vs 2021
    • Current YTD Real change – % vs 2021 factoring in inflation
  • Current YTD change vs 2019 – % & $
    • Current Real change YTD vs 2019 – % factoring in inflation
  • Monthly & YTD $ & CPIs which are targeted by channel will also be shown. (CPI details are at the end of the report)

First, the October Final. All groups were up from last month and for October and YTD vs 2021. However, factoring inflation into the data, only Restaurants and Gas Stations were up for the month and in YTD $, only Restaurants were up. Here is the October data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The October Final is $0.4B more than the Advance. Relevant Retail had the only negative: -$0.9B; Restaurants: +0.1B; Auto: +$0.6B; Gas Stations: +$0.6B. Sales are up from last month and consumers continue to spend more vs 2021. However, the “real” numbers tell a slightly different story. Only Restaurants and Gas Stations (just barely) are really up for the month but again only Restaurants are really up in YTD $. Auto & Gas Stations also remain really down YTD vs 2019. The inflation impact on Relevant Retail is significant and concerning. Their Real YTD $ales vs 2021 have been negative for 7 months. They do have the best performance since 2019 as 61.4% of their 32.1% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in October

Overall – 9 of 11 were up from September. Vs Oct 2021, 10 reported more $ but only 6 were really up. In YTD vs 2021, again 10 reported increases but only 4 were real. Vs 2019, for the 2nd consecutive month, all were “really” up.

  • Building Material Stores – Sales are flat vs Sept for Home Ctr/Hdwe but up 7.8% YTD vs 21. Farm stores are +11.4% vs Sept but only +5.8% YTD vs 2021. The Bldg/Matl group has a YTD inflation rate of 11.0% which has produced negative real numbers. The pandemic caused consumers to focus on their homes which has produced sales growth of 36.7% since 2019. Importantly, 57% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.9%, Real: 6.4%; Farm: 12.3, Real: 7.9%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The YTD rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are now positive in all measurements and 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & YTD. Also, only 14% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.7%, Real: +1.0%; Drug Stores: +4.7%, Real: +4.2%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up only 0.02% from September but 2022 YTD sales are still 1.9% above 2021. Their current inflation rate is 3.0% which is down from 7.5% in April but YTD it is still 5.6%. It was even higher in 20>21, +6.5%. However, 71% of their 48% lift since 2019 is real. Their Avg Growth Rate was: +14.1%; Real: +10.4%.
  • Gen Mdse Stores – All channels were up from September and only Discount Dept Stores were down for the month and YTD vs 2021. All real numbers for all channels monthly and YTD vs 2021 are negative. Disc. Dept Stores were hurting before COVID but their YTD sales are again “really” up vs 2019. The other channels have 38% real growth. Avg Growth Rate: SupCtr/Club: 5.9%, Real: 2.2%; $/Value Strs: +7.7%, Real: +4.1%; Disc. Dept.: +2.8%, Real: +0.1%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up 24% from September. The big news is that their sales growth in 2022 has been strong enough that for the 1st time they are positive in all measurements vs 2021 and vs 2019. They have made remarkable progress. Avg Growth Rate: +3.6%, Real: +0.9%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. Sales are up from September and for all other measurements. Their YTD growth rate is only half of their average since 2019, but 89% of their 78.4% growth since 2019 is real. Avg Growth Rates: +21.3%, Real: +19.3%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level by December 2021 as annual sales reached $100B for the first time. Their sales dipped in January, July, September & October but all measurements have been positive for every other month. In 2022, they are by far the Sales increase leaders over 2021. Plus, 86% of their 58.8% growth since 2019 is real. Average Growth Rate is: +16.7%, Real: +14.6%. They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, all channels reported increases in monthly and YTD sales over 2021. When you factor in inflation, the number with any “real” growth falls to 6 for monthly & 4 for YTD. This is a clear indication of the ongoing strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ numbers for November.

We have had memorable times since 2019. Some big negatives, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $600B in a month for the first time and broke the $7 Trillion barrier in 2021.  Relevant Retail was also strong as annual sales reached $4T and all big groups set annual $ales records in 2021. In 2022 radical inflation is a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. Only Relevant Rtl & Total were up from Oct., but all groups were up vs November & YTD 2021. However, in the amount of product sold: Monthly: All are down but Restaurants & Gas. YTD: All are down but Restaurants

Overall – Inflation Reality Inflation vs 2021 continues to beat the $ increase rate. Only Rel. Retl is up vs October, but all are up for the month and YTD vs 2021. Restaurants are really positive vs 2021. Gas Stations are really up for the month vs 2021 but all others are down. The real YTD sales vs 2021 are down for all but Restaurants for the 8th straight month.

Total Retail – Every month in 2022 has set a monthly sales record. November $ are $697B, the 5th highest of all time. 2022 has become somewhat normal as sales dipped in September then grew in October & November. November $ are +1.2% vs October but are up 6.5% vs November 2021 and 9.6% vs YTD 2021. However, when you factor in inflation, monthly sales are down -0.5% and YTD sales are down for the 9th consecutive month. Plus, only 39% of the 32% growth since 2019 is real. The Avg Growth Rate is: +9.7%, Real: +4.1%. Even as inflation slows, it continues to have an impact.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. Sales in the last 9 months of 2021 exceeded $70B and 2021 was the biggest year in history, $876B. January sales fell from December but then turned up, setting new all-time monthly records in March>May. $ fell in June, set a new record in July and then fell again in Aug>Sep. October sales rose and hit $90B for the 1st time but fell in November. They are the only big group that is positive in all measurements vs 2021 & 2019. Inflation is high at 8.4% for November and 7.5% YTD and contrary to the trend, it is not improving. 56.5% of their 32.4% growth since 2019 is real. Their Avg Growth Rate: +9.8%, Real: +5.8%. They only account for 12.7% of Total Retail $ales, but their performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, then flipping monthly with November being down. They have 4 down months in actual sales which are the only reported sales negatives by any big group vs 2021. This is bad but their real YTD sales numbers are much worse. Extremely high inflation has pushed their real YTD sales down -9.1% vs 2021, the worst of any group. Plus, their 23.8% growth since 2019 is really down -11.8%. Avg Growth: +7.4%, Real: -4.1%. Inflation has slowed markedly in the last 6 months. It is likely that the 4 drops in $ales were tied to high inflation.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and obviously need less gas. This group started recovery in March 2021 and reached a record $584B for the year. Sales fell Jan>Feb, turned up Mar>Jun, fell in Jul>Sep, up in Oct then down in Nov. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation has slowed but is still high at 10.8% and 35.5% YTD. Monthly real sales are now positive, but YTD sales are still really down -2.8% vs 2021 and -3.1% vs 2019. Avg Growth Rate: +14.3%, Real: -1.1%.The YTD numbers show a big impact of inflation. Consumers spend more but buy less, even less than they bought 3 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This the “core” of U.S. retail and accounts for 60+% of Total Retail Spending. There are a variety of channels in this group, so they took a number of different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales fell in Jan>Feb, then went on an up/down roller coaster from Mar>Nov with November up 6.8%. All months in 2022 set new records but their YTD increase is 28% below their 9.8% avg growth since 2019. Now, we’ll look at the impact of inflation. 60.9% of their 32.2% growth since 2019 is real. However real sales vs 2021 are down -2.3% for the month and -1.0% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.8%, Real: +6.1%. The performance of this huge group is critically important. This is where America shops. Real YTD sales are down 1% so the amount of products that consumers bought in 2022 is less than in 2021. They just paid more. That’s not good.

Inflation is slowing slightly but the impact is still there. All groups but Restaurants have no YTD real growth vs 2021 and Auto & Gas Stations are still “really down” vs YTD 2019. We’ve now had 9 straight months of real YTD drops for Total Retail and 8 straight for Relevant Retail. We are still in Inflation Phase II. Consumer spending grows but the amount bought declines. Auto sales in 4 of the last 9 months were down vs 2021, but inflation slowed so they have avoided Phase III, when consumer spending drops. Inflation also fell for Gas Stations so their monthly real sales are now positive.

Here’s a more detailed look at November by Key Channels

  • Relevant Retail: Avg Growth Rate: +9.8%, Real: +6.1%. 8 of 11 channels were up from October and 8 were up vs October 2021, but 10 were up YTD vs 2021. The negative impact of inflation is less but still there in the “real” data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. They are up from October but down vs November 2021. Their YTD reported numbers have been positive vs 2019 since April but they are still “really” down in all measurements vs both 2019 & 2021. Avg Growth: +0.2%, Real: -2.7%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is a big factor in their current numbers. Sales are up from October and vs 2021. Their real numbers are all down vs 2021 and only 37.1% of their 19.7% lift from 2019 is real. Avg Growth: +6.2%, Real: +2.4%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are up from October. The increases vs 2021 are strong but inflation is stronger. Real sales are down and only 12.9% of the growth since 2019 is real. Avg Growth: +6.8%, Real: +0.9%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down slightly from October but are ahead in all measurements vs 2021 – actual & “real”. Their inflation rate is low so 89% of their 16.0% growth from 2019 is real. Their Avg Growth is: +5.1%, Real: +4.5%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 2021 with strong growth through May 2022. November sales are +16.1% from October and +1.7% from 21 but real sales are down -1.8%. YTD $ are up 6.8% and 86% of their growth from 2019 is real. Avg Growth: +5.1%, Real: +4.4%.
  • Home Furnishings – Sales dipped Mar>May in 2020. Then as consumers’ focus turned to their homes, furniture became a priority. Inflation has been high. Monthly Sales are -3.3% vs 2021 and only up 1.0% YTD vs 2021. All of their real numbers vs 2021 are very negative. Only 12.5% of their growth since 2019 is real. Avg Growth: +6.0%, Real: +0.8%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are up from October but down vs 2021. Deflation pushed their real November sales +2.6%. Sales are even down vs 2019, but deflation kept their “real” YTD sales up +0.02% vs 2019. Avg Growth: -0.7%, Real: +0.01%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift ended in May. Sales fell in November after a slight lift in October. Monthly & YTD sales are up vs 2021, but when you factor in double-digit inflation, the real amount sold is down for both measurements. However, 55.7% of their strong 36.8% sales growth since 2019 is real. Their Avg Growth is: +11.0%, Real: +6.6%.
  • 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. November $ jumped +17.3% from October and are ahead of 2021, monthly & YTD. However, real YTD $ are down again vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 78.7% of their 39.0% growth since 2019 is real. Avg Growth is: +11.6%, Real: +9.3%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21. They set a new monthly $ales record in December. Sales are -1.9% from October but up vs 2021. Since April they have held the top spot in YTD increase vs 2021. Their YTD growth since 2019 is 2nd only to NonStore and 81% of the 44.8% growth since 2019 is real. Their Avg Growth is: +13.1%, Real: +10.9%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their YTD Growth has slowed significantly in 2022 but all measurements are positive. 87.6% of their 73.2% increase since 2019 is real. Their Avg Growth is: +20.1%, Real: +18.0%.

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, a new challenge came to the forefront – extreme inflation, the worst in 40 years. Overall, and in most product categories it has slowed in Jul>Nov. On the surface, the Retail impact is almost invisible. Sales in the total market and in the Relevant Retail group continue to grow but the growth rate has markedly slowed compared to last year. Overall, the retail market is generally in phase II of strong inflation – spending grows but the amount purchased falls. November is the traditional start of the Holiday Shopping season, so the obvious question is, “How is it going?” The channels most impacted are – Clothing, General Merchandise, Electronics, Nonstore, Sporting Gds and Miscellaneous. These channels produced 61% of Relevant Retail November Sales but 100% of the increase from October & 59% of the lift from 2021. They were up 5.3% from 2021 and real sales were +0.4%, much better than -2.3% for Relevant Retail. The Holiday lift has begun but it is rather small. BTW – 67% of the increase came from Nonstore.

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.

Monthly CPI changes of 0.2% or more are highlighted.

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

 

Retail Channel Monthly $ Update – August Final & September Advance

By 2021, the market had generally recovered from the impact of the pandemic. Now we are being hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for August and then move to the Advance Report for September. Our focus is comparing 2022 to 2021 but also YTD 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2021
    • Current Month Real change – % vs same month in 2021 factoring in inflation
  • Current YTD change – % & $ vs 2021
    • Current YTD Real change – % vs 2021 factoring in inflation
  • Current YTD change vs 2019 – % & $
    • Current Real change YTD vs 2019 – % factoring in inflation
  • Monthly & YTD $ & CPIs which are targeted by channel will also be shown. (CPI details are at the end of the report)

First, the August Final. Total Sales turned up after 2 down months and the $ for all were up for August and YTD vs 2021. However, factoring inflation into the data, only Relevant Retail was down for the month but in YTD $, only Restaurants were up. Here is the August data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The August Final is $2.3B more than the Advance Report. Relevant Retail had the biggest change: +$1.6B; Restaurants: +0.9B; Auto: +$0.5B; Gas Stations: -$0.7B. Sales are up from last month in all but Restaurants & Gas Stations and consumers continue to spend more vs 2021. However, the “real” numbers tell a slightly different story. Only Relevant Retail is really down for the month but again only Restaurants are really up in YTD $. Restaurants had a late pandemic recovery and it is still growing. The inflation impact on Relevant Retail is significant. Their Real YTD $ales vs 2021 have been negative for 5 months. They do have the best performance since 2019 as 63% of their 31.6% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in August

Overall – 8 of 11 were up vs July. Vs August 2021, all reported more $ but only 6 were really up. In YTD vs 2021, all reported increases but only 4 were real. Vs 2019, only Office/Gift/Souvenir & Discount Dept Stores were “really” down.

  • Building Material Stores – A Fall lift has started early. YTD Home Ctr/Hdwe is up 7.7% vs 21 but Farm stores are only +3.4%. The Bldg/Matl group has a YTD inflation rate of 10.9% which has produced negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 36% since 2019 in both channels. Importantly, 60% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.9%, Real: 6.7%; Farm: 11.7, Real: 7.6%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The YTD rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are up from July and vs 2021. Real sales are down vs August 2021 but 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & YTD. Also, only 16% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.4%, Real: +1.1%; Drug Stores: +4.6%, Real: +4.0%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Their sales increased in August and 2022 YTD sales are now 1.2% above 2021. Their current inflation rate is 3.8% which is down from 7.5% in April but YTD it is still 6.3%. It was also high in 20>21, +4.8%. However, 71% of their 47% lift since 2019 is real. Their Avg Growth Rate was: +13.8%; Real: +10.1%.
  • Gen Mdse Stores – Only Discount Dept store sales were up from July. However, all are now up for the month and YTD vs 2021. All real measurements vs 2021 are negative for all channels. Disc. Dept Stores were hurting before COVID and now their YTD sales are again “really” down from 2019. The other channels have 38% real growth. Avg Growth Rate: SupCtr/Club: 5.5%, Real: 2.0%; $/Value Strs: +7.5%, Real: +4.1%; Disc. Dept.: +2.4%, Real: -0.2%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up across the board vs July & 2021. The growth vs 2021 has been strong enough that it turned real YTD sales positive vs 2021. However, their real sales vs 2019 are still down -1.7%. Their true recovery is still a ways off. Avg Growth Rate: +2.1%, Real: -0.6%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. August Sales are up vs July and 2021 but their YTD growth rate is only half of their average since 2019. However, 90% of their 78.9% growth since 2019 is real. Their Avg Growth Rates is: +21.4%, Real: +19.5%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level by December 2021 as annual sales reached $100B for the first time. In 2022, they are by far the Sales increase leaders over 2021. Their sales dipped in January from December and again in July, but all measurements have been positive for every other month. Plus, 86% of their 59.1% growth since 2019 is real. Average Growth Rate is: +16.7%, Real: +14.7%.They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, all channels reported increases in monthly  and YTD sales over 2021. When you factor in inflation, the number with any “real” growth falls to 6 for monthly & 4 for YTD. This is a clear indication of the ongoing strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ numbers for September.

We have had memorable times since 2019. Some big negatives, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $600B in a month for the first time and broke the $7 Trillion barrier in 2021.  Relevant Retail was also strong as annual sales reached $4T and all big groups set annual $ales records in 2021. Now, radical inflation is a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. We saw this again in September. Sales fell from August but all groups were up vs September & YTD 2021. However, in the actual amount of product sold YTD vs 2021, all groups but Restaurants were down.

Overall – Inflation Reality is still here. The monthly increase vs 2021 continues to be lower than the inflation rate. The spending for all groups fell from August but all are up for the month and YTD vs 2021. However, the real YTD sales vs 2021 for all but restaurants are down for the 6th straight month.

Total Retail – Every month in 2022 has set a monthly sales record. September $ are $661B, the 8th highest of all time. 2022 has become somewhat normal as sales were stable for 4 months then dipped slightly in September. September $ are -5.7% vs August but are up 8.6% vs September 2021 and 10.1% vs YTD 2021. However, when you factor in inflation, monthly sales are down -0.9% and YTD sales are down for the 7th consecutive month. Plus, only 40% of the 32% growth since 2019 is real. The Avg Growth Rate is: +9.7%, Real: +4.1%. The impact of Inflation continues.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. Sales in the last 9 months of 2021 exceeded $70B and 2021 was the biggest year in history, $876B. January sales fell from December but then turned up, setting new all-time monthly records in March>May. $ fell in June, set a new record in July and then fell again in Aug>Sep. They are the only big group that is positive in all measurements vs 2021 & 2019. Inflation is high at 8.3% for August and 7.2% YTD but it is still the lowest of any big group. 58.0% of their 31.7% growth since 2019 is real. Their Avg Growth Rate: +9.6%, Real: +5.8%. They only account for 12.7% of Total Retail $ales, but their strong performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, June up, July down, August up, September down. They have 4 down months in actual sales which are the only reported sales negatives by any big group vs 2021. This is bad but their real YTD sales numbers are much worse. Extremely high inflation has pushed their real YTD sales down -11.3% vs 2021, the worst of any group. Plus, their 24.6% growth since 2019 is really down -3.1%. Their Avg Growth: +7.6%, Real: -1.1%. Inflation has slowed in the last 4 months. It is likely that the 4 drops in $ales vs 2021 were tied to high inflation.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and obviously need less gas. This group started recovery in March 2021 and reached a record $584B for the year. Sales fell in Jan>Feb turned up in Mar>Jun then fell in Jul>Sep. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation has slowed so September $ are really up vs 2021. Inflation is still 18.8% and 40.8% YTD, the highest of any expenditure category. It has even caused consumers to buy 4.3% less than they did in 2019. Avg Growth Rate: +14.5%, Real: -1.4%. The YTD numbers show a big impact of inflation. Consumers spend more but buy less, even less than they bought 3 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This the “core” of U.S. retail and accounts for 60+% of Total Retail Spending. There are a variety of channels in this group, so they took a number of different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales fell in Jan>Feb, then went on an up/down roller coaster from Mar>Sep with September down 5.2%. All months in 2022 set new records but their YTD increase is 14% below their 9.7% avg growth since 2019. Now, we’ll look at the impact of inflation. 62.2% of their 32.0% growth since 2019 is real. However real sales vs 2021 are down -1.7% for the month and -0.8% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.7%, Real: +6.2%. The performance of this huge group is critically important. This is where America shops. Real YTD sales are down almost 1% so the amount of products that consumers bought in 2022 is less than in 2021. They just paid more. That’s not good.

Inflation is slowing slightly but the impact is still there. All groups but Restaurants have no YTD real growth vs 2021 and Auto & Gas Stations are still “really down” vs YTD 2019. We’ve now had 7 straight months of real YTD drops for Total Retail and 6 straight for Relevant Retail so we are still in Phase II of inflation. Consumer spending grows but the amount bought declines. With actual sales in 4 of the last 7 months down vs 2021, the Auto Group is close to Phase III, when consumers actually cut back on spending. If inflation continues, Phase III could become a reality.

  • Relevant Retail: Avg Growth Rate: +9.7%, Real: +6.2%. All 11 channels were down vs August but 10 were up vs September & YTD 2021. The negative impact of inflation is less but still there in the “real” data.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow in 2022. Their YTD numbers have been positive vs 2019 since April but they are still down in “real” terms in all measurements vs both 2019 & 2021. Avg Growth: +0.3%, Real: -2.5%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is a big factor in their current numbers. Sales are down from August but up vs 2021. Their real numbers are all down vs 2021 and only 37.9% of their 19.0% lift from 2019 is real. Avg Growth: +6.0%, Real: +2.4%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are down from August. The increases vs 2021 are strong but inflation is stronger. Real sales are down and only 14.3% of the growth since 2019 is real. Avg Growth: +6.5%, Real = +1.0%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales dipped in August but are ahead in all measurements vs 2021 – actual & “real”. Their inflation rate is low so 89% of their 15.8% growth from 2019 is real. Their Avg Growth is: +5.0%, Real: +4.5%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 2021 and resulted in explosive growth through May 2022. September sales are +4.5% from 21 but real sales are -0.9%. YTD $ are up 7.8%% and 87% of their growth from 2019 is real. Avg Growth: 5.0%, Real: +4.4%.
  • Home Furnishings – They were also less impacted by COVID. Sales dipped Mar>May in 2020. Then as consumers’ focus turned to their homes, furniture became a priority. Inflation is high. Sales are up slightly vs 2021 but all of their real numbers vs 2021 are very negative. Only 19.3% of their growth since 2019 is real. Avg Growth: +6.5%, Real: +1.3%.
  • Electronic & Appliances – This channel has problems beyond the pandemic. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are down from August and in all measurements vs 2021. Actual sales are even down vs 2019. However, deflation did keep their “real” YTD sales up +0.6% vs 2019. Avg Growth: -0.2%, Real: +0.2%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift ended in May. Sales dropped in September after an unexpected sharp increase in August. Monthly & YTD sales are up vs 2021, but when you factor in double-digit inflation, the real amount sold is down for both measurements. However, 58.8% of their strong 37.1% sales growth since 2019 is real. Their Avg Growth is: +11.1%, Real: +6.8%.
  • 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. September $ fell 11.7% from August but are still ahead of 2021, monthly & YTD. However, real YTD $ are still down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 78.6% of their 38.3% growth since 2019 is real. Avg Growth is: +11.4%, Real: +9.2%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21. They set a new monthly $ales record in December. Sales are down 7.5% from August but since April they have held the top spot in YTD increase vs 2021. Their YTD growth since 2019 is 2nd only to NonStore. Plus, 81.8% of the 45.1% growth since 2019 is real. Their Avg Growth is: +13.2%, Real: +11.0%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their YTD Growth has slowed significantly in 2022 but all measurements are positive. 88.1% of their 73.3% increase since 2019 is real. Their Avg Growth is: +20.1%, Real: +18.1%.

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. While the timing varied between channels, by the end of 2021 it had become very widespread. In late 2021 and now in 2022, a new challenge came to the forefront – extreme inflation. It isn’t the worst in history, but it is the biggest increase in prices in 40 years. Overall, and in most product categories it has slowed in Jul>Sep. However. it continues to grow in Services. On the surface, the Retail impact is almost invisible. Sales in the total market and in the Relevant Retail group continue to grow but the growth rate has markedly slowed compared to last year. Overall, the retail market is generally in phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph illustrate this perfectly and show how widespread that it has become. 10 of 11 channels are up vs September & YTD 2021. However, if you factor in inflation, only 4 are up for either measurement. Inflation is real and there are real and even worse consequences if it continues.

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 these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates.

Monthly CPI changes of 0.2% or more are highlighted.

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

Retail Channel Monthly $ Update – July Final & August Advance

By 2021, the market had generally recovered from the impact of the pandemic. Now we are being hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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 Final 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 final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for July and then move to the Advance Report for August. Our focus is comparing 2022 to 2021 but also YTD 2019. We’ll show both actual and the “real” change in $ 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 will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2021
    • Current Month Real change – % vs same month in 2021 factoring in inflation
  • Current YTD change – % & $ vs 2021
    • Current YTD Real change – % vs 2021 factoring in inflation
  • Current YTD change vs 2019 – % & $
    • Current Real change YTD vs 2019 – % factoring in inflation
  • Monthly & YTD $ & CPIs which are targeted by channel will also be shown. (CPI details are at the end of the report)

First, the July Final. Total Sales turned down for the 2nd straight month but the $ were up for July and YTD vs 2021. However, factoring inflation into the data, for the 4th straight month only Restaurants had increases in these measurements. Here is the July data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The July Final is $0.7B less than the Advance Report. Restaurants had the biggest change: -1.1B; Relevant Retail: +0.4B; Auto: -$0.4B; Gas Stations: +$0.4B. Sales are down again from last month in all but Restaurants, but consumers continue to spend more vs 2021, except for another dip in Auto. However, the “real” numbers tell a different story. All but Restaurants are again really down in all measurements vs 2021. Restaurants had a late recovery and half of the inflation in this group came before 2022. The inflation impact on Relevant Retail is especially significant as their Real YTD sales vs 2021 are again negative. They do have the best performance since 2019 as 64.4% of their 31.7% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in July.

Overall – 6 of 11 were down vs June. Vs July 2021, 10 reported more $ but only 3 were really up. In YTD vs 2021, 9 reported increases but only 4 were real. Vs 2019, only Office/Gift/Souvenir & Discount Dept Stores were “really” down.

  • Building Material Stores – Their Spring lift has ended and was not as strong as last year. YTD Home Ctr/Hdwe is up 6.8% vs 21 but Farm stores are only +2.2%. The Bldg/Matl group has an inflation rate of 10.8% which produced all negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 36% since 2019 in both channels. Importantly, 61.1% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.9%, Real: 6.7%; Farm: 11.4, Real: 7.3%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The YTD rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are down from June but up vs 21. Real sales are down vs July 2021 but 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & YTD. Also, only 19.8% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.5%, Real: +1.4%; Drug Stores: +4.4%, Real: +3.9%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Their Spring lift seems to be over and 2022 YTD sales are essentially equal to 2021. Their current inflation rate is 5.2% which is down from 7.5% in April but YTD it is still 6.7%. It was also high in 20>21, +4.8%. However, 72% of their 48% lift since 2019 is real. Their Avg Growth Rate was: +14.0%; Real: +10.4%.
  • Gen Mdse Stores – Sales were up for all but $/Valu vs June. Discount Dept stores are down for the month and YTD vs 2021. All other groups are up for both. All real measurements vs 2021 are negative for all channels. Disc. Dept Stores were hurting before COVID and now their sales are “really” down from 2019. The other channels have 41% real growth. Avg Growth Rate: SupCtr/Club: 5.7%, Real: 2.2%; $/Value Strs: +7.6%, Real: +4.3%; Disc. Dept.: +2.6%, Real: -0.001%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up across the board vs June & 2021. The growth vs 2021 has been strong enough that it turned real YTD sales positive vs 2021. However, their real sales vs 2019 are still down -1.9%. Their true recovery is still a ways off. Avg Growth Rate: +1.9%, Real: -0.6%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. July Sales are up vs June and 2021 but their YTD growth rate is only half of their average since 2019. However, 92% of their 79.0% growth since 2019 is real. Their Avg Growth Rates is: +21.4%, Real: +19.6%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level by December 2021 as annual sales reached $100B for the first time. In 2022, they are by far the Sales increase leaders over 2021. Their sales dipped in January from December and again in July but all measurements have been positive for every other month. Plus, 87% of their 59.4% growth since 2019 is real. Average Growth Rate is: +16.8%, Real: +14.9%. They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, 10 of 11 channels reported increases in monthly  and YTD sales over 2021. When you factor in inflation, the number with any “real” growth falls to 4 for YTD & 3 for monthly. This is a very clear indication of the strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail Sales numbers for August.

We have had memorable times since 2019. Some big negatives, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $600B in a month for the first time and broke the $7 Trillion barrier in 2021.  Relevant Retail was also strong as annual sales reached $4T and all big groups set annual $ales records in 2021. Now, radical inflation is a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. This was evident again in August Relevant Retail $. There was a small overall sales increase from July and $ were up vs July 2021 for all. However, in Relevant Retail the actual amount of product sold vs 2021 fell.

Overall – Inflation Reality is still here. The monthly increase vs 2021 continues to be lower than the inflation rate. The still recovering Restaurants and Gas Stations are up double digits vs 2021 and Auto $ turned positive again. August set a new monthly $ record, but the real YTD sales vs 2021 for all but restaurants are down for the 5th straight month.

Total Retail – Every month in 2022 has set a monthly sales record. August $ are $699B, the 3rd largest of all time. 2022 has become somewhat normal as sales have stayed near the current level for 4 months. We should now expect a slight dip in September. August $ are +1.3% vs July and are up 10.4% vs August 2021 and 10.3% vs YTD 2021. However, when you factor in double digit inflation, both measurements are down for the 6th consecutive month and only 39.9% of the 31.6% growth since 2019 is real. The Avg Growth Rate is: +9.6%, Real: +4.0%. The impact of Inflation continues.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. Sales in the last 9 months of 2021 exceeded $70B and 2021 was the biggest year in history, $876B. January sales fell from December but then turned up, setting new all-time monthly records in March>May. $ fell in June, set a new record in July and then fell again in August. They are the only big group that is positive in all measurements vs 2021 & 2019. Inflation is high at 7.9% for August and 7.1% YTD but it is the lowest of any big group. 58.7% of their 31.0% growth since 2019 is real. Their Avg Growth Rate: +9.4%, Real: +5.7%. They only account for 12.6% of Total Retail $ales, but their strong performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, June up, July down, August up. The August lift was strong, +9.5%. Their 4 down months are the only reported sales negatives by any big group vs 2021. This is bad but their real YTD sales numbers are much worse. Extremely high inflation has pushed their real YTD sales down -12.4% vs 2021, the worst of any group. Plus, their 24.3% growth since 2019 is really down -10.7%. Their Avg Growth Rate: +7.5%, Real: -3.7%. Inflation has slowed in the last 3 months. It is likely that the 4 drops in $ales vs 2021 were tied to higher inflation.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and obviously need less gas. This group started recovery in March 2021 and reached a record $584B for the year. Sales fell in Jan>Feb turned up in Mar>Jun then fell in Jul>Aug. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation has slowed so August $ are really up vs 2021. Inflation is still 26.2% and 43.9% YTD, by far the highest of any expenditure category. It has even caused consumers to buy 5.1% less than they did in 2019. Avg Growth Rate: +14.7%, Real: -1.7%. The YTD numbers show a big impact of inflation. Consumers spend more but buy less, even less than they bought 3 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This the “core” of U.S. retail and accounts for 60+% of Total Retail Spending. There are a variety of channels in this group, so they took a number of different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales fell in Jan>Feb, then went on an up/down roller coaster from Mar>Aug with August up 1.9%. All months in 2022 set new records but their YTD increase is 18% below their 9.6% avg growth since 2019. Now, we’ll look at the impact of inflation. 62.9% of their 31.5% growth since 2019 is real. However real sales vs 2021 are down -1.2% for the month and -0.8% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.6%, Real: +6.2%. The performance of this huge group is critically important. This is where America shops. Real YTD sales are down almost 1% so the amount of products that consumers bought in 2022 is less than in 2021. They just paid more. That’s not good.

The impact of inflation is slowing slightly. All groups but Restaurants have no YTD real growth vs 2021 but only Relevant Retail is really down for the month. Auto & Gas Stations are still “really down” vs YTD 2019. We’ve now had 6 straight months of real monthly and YTD drops for Total Retail so we are still in Phase II of inflation. Consumer spending grows but the amount bought declines. With actual sales in 4 of the last 6 months down vs 2021, the Auto Group is close to Phase III, when consumers actually cut back on spending. If inflation continues, Phase III could become a reality.

  • Relevant Retail: Avg Growth Rate: +9.6%, Real: +6.2%. 9 channels were up vs July and 10 vs August 2021, producing an August $ales record. 10 were up YTD vs 2021. The negative impact of inflation is less but still there in the “real” data.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow in 2022. Their YTD numbers have been positive vs 2019 since April but in August they are still down in “real” terms in all measurements vs both 2019 & 2021. Avg Growth: +0.06%, Real: -2.7%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is a big factor in their current numbers. Sales are down from July but up vs August 2021 and YTD. Their real numbers are down vs 2021 and only 38.4% of their 18.5% lift from 2019 is real. Avg Growth: +5.8%, Real: +2.3%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are down from July. Monthly & YTD increases vs 2021 are strong but inflation is stronger. Real sales are down and only 16.0% of the growth since 2019 is real. Avg Growth: +6.5%, Real: +1.1%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. After a dip in June, sales turned up in Jul>Aug and are ahead of 2021. However, real sales vs August 21 are down. Their inflation rate is low so 89% of their 14.7% growth from 2019 is real. Their Avg Growth is: +4.7%, Real: +4.2%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 2021 and resulted in explosive growth which continued through May 2022. August sales are up +3.7% from 21 but real sales are -1.3%. YTD $ are up 7.9%% and 87% of their growth from 2019 is real. Avg Growth: 4.8%, Real: 4.1%.
  • Home Furnishings – They were also less impacted by COVID. Sales dipped Mar>May in 2020. Then as consumers’ focus turned to their homes, furniture became a priority. Inflation is high. Sales are up from July and vs 2021 but all of their real numbers vs 2021 are negative. Only 18.4% of their growth since 2019 is real. Avg Growth: +6.3%, Real: +1.2%.
  • Electronic & Appliances – This channel has problems beyond the pandemic. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are up from July but are down vs 2021. The July lift was not enough to keep sales positive vs 2019 but deflation kept “real” sales up for the month & YTD vs 2019. Avg Growth: -0.08%, Real: +0.3%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift ended in May as Sales dropped in Jun>Jul. However, they turned sharply up in August. Monthly & YTD sales are up vs 2021, but when you factor in strong, double-digit inflation, the amount sold YTD vs 2021 is still down -3.8%. However, 59.0% of their strong 36.6% sales growth since 2019 is real. Their Avg Growth is: +11.0%, Real: +6.7%.
  • 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. August sales grew 10.7% from July and are still ahead of 2021, monthly & YTD. However, real YTD $ are still down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 79% of their 37.6% growth since 2019 is real. Avg Growth is: +11.2%, Real: +9.0%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21. They set a new monthly $ales record in December. Sales are up 3.6% from July and since April they have held the top spot in YTD increase vs 2021. Their YTD growth since 2019 is 2nd only to NonStore. Plus, 82.2% of the 45.6% growth since 2019 is real. Their Avg Growth is: +13.3%, Real: +11.2%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their YTD Growth has slowed significantly in 2022 but all measurements are positive. 88.4% of their 73.2% increase since 2019 is real. Their Avg Growth is: +20.1%, Real: +18.1%.

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. While the timing varied between channels, by the end of 2021 it had become very widespread. In late 2021 and now in 2022, a new challenge came to the forefront – extreme inflation. It isn’t the worst in history, but it is the biggest increase in prices in 40 years. Overall, it slowed in Jul>Aug but for Relevant Retail it got worse. On the surface, the impact is almost invisible. Sales in the total market and in the Relevant Retail group continue to grow but the growth rate has markedly slowed compared to last year. Overall, the market is generally in phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph illustrate this perfectly and show how widespread that it has become. 10 of 11 channels are up vs August & YTD 2021 However, when you factor in inflation, only 5 are up for August and 4 for YTD. Inflation is real and there are real and even worse consequences if it continues.

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 these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates.

Monthly CPI changes of 0.2% or more are highlighted.

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. 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?
    1. 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.
    1. 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?
    1. 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.
    1. 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?
    1. 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.

 

2021 Top 100 U.S. Retailers – Sales: $2.66 Trillion, Up 9.7% 162,495 Stores with Pet Products……plus the Internet!

The U.S. Retail market reached $7.44 Trillion in 2021 from all channels – Auto Dealers, Supermarkets, Restaurants, Online retailers and even Pet Stores. Thanks to a strong, widespread pandemic recovery, this year’s increase of $1.22T (+19.8%) was far above last year’s increase of $44.6B (+0.7%). In 2020 the Total Retail Market was massively negatively impacted by COVID related closures and restrictions and only eked out a positive number because of increased spending in the Relevant Retail Segment. In 2021 there was a stronger and more balanced resurgence. (Data courtesy of the Census Bureau’s monthly retail trade report.)

In this report we will focus on the top 100 Retailers in the U.S. Market. The base data on the Top 100 comes from Kantar Research and was published by the National Retail Federation (NRF). In 2020, Restaurants were removed from the list and only Gas Stations with Convenience stores were included. To allow continued comparisons to pre-pandemic 2019, I used the data to create a revised “Restaurant Free” 2019 list. The Top 100 are the retail elite and still account for 35.8% of the total market, which is down from a record 39.0% in 2020. The vast majority of the group also stock and sell a lot of Pet Products. Let’s get started in our analysis. The report does contain a lot of data, but we’ll break it up into smaller pieces to make it more digestible.

In past years we have begun our report with a brief overview chart of this year’s sales vs the previous year’s numbers. However, the pandemic effect on the retail trade has indicated that we should look a little deeper. The U.S. Retail market has had a strong recovery from the 2020 trauma and the resurgence has become widespread across most channels. We have seen in our regular retail sales reports that different defined retail channels often took a different path from 2019 to 2021. The Top 100 report allows us to see if the company revenue size was also a factor in their journey. The following chart is definitely an overview, but it is far more detailed than past years. It also covers the pandemic period from 2019 to 2021, including both $ and market share changes for large retail subgroups of the Relevant Retail Segment based upon the amount of annual revenue.

  • The total Retail Market grew $1.2T, +19.6% in 2021. That is far greater than the $45B, +0.7% in 2020. The average growth rate since 2019 is 9.8%. That is more than double the rate of recent years: 2019, 3.6%; 2018, 4.9%; 2017, 4.3%. You can clearly see the strength of the recovery.
  • The “Non-Relevant” Retail Group (Restaurants, Auto Dlrs, Gas Stations) was hit hardest by the pandemic, with sales falling $240B, -9.9% in 2020. However, they had an incredibly strong recovery in 2021 as sales grew $640B, +29.3%. They gives them an average annual growth rate of 7.9% since 2019.
  • Relevant Retail was the hero of the pandemic. Their $284B increase in 2020 kept Total Retail positive for the year. Their sales surged even stronger in 2021 as they were up $582B, +14.4% producing an average growth rate since 2019 of +11.0%. However, their share of Total Retail fell 2.3% after peaking in 2020. As you can see, the story is a bit more complex. Let’s drill a little deeper.
  • The Top 100 Retailers make up about 60% of the Relevant Retail Market. They have shown consistent growth since 2019 with a surge of $236B, +9.9% in 2021. Their average growth since 2019 is +7.2%, which is good but not good enough. They have lost considerable share in both Total and Relevant Retail. Let’s drill even deeper.
  • The biggest subgroup in the Top 100 is the Top 10 which accounts for 55+% of the Top 100’s revenue. This group has been unchanged since 2015 and consists of Amazon, plus truly essential brick ‘n mortar retailers. Their biggest sales surge occurred in 2020. Sales grew 9.0% in 2021 but their share of revenue decreased in Total and Relevant Retail. Their average growth rate since 2019 is +10.6% which did produce a 3.6% share gain in Top 100 $.
  • The Retailers ranked from #11 to #100 changes slightly every year. Their sales in 2021 ranged from $3.5 to $65B and they accounted for 41% of the Top 100’s revenue. They have an unusual sales pattern in that their $46B decrease in 2020 is the only negative sales on the chart outside of the big drop by Rest/Auto/Gas. They did have a strong 10.7% increase in 2021 which generated an average annual gain of +2.9%. However, they have lost significant share in Total & Relevant Retail. These companies are a major part of U.S. Retail. They can have big gains but also big losses.
  • The Relevant Retailers outside of the Top 100 don’t get a lot of “press” but maybe they should. They currently account for 42% of Relevant Retail $ and 26% of Total Retail. Their 12.1% increase in 2020 was only slightly behind the Top 10 and their 21.6% increase in 2021 was more than double that of any other Relevant Retail subgroup. Their avg. increase since 2019 is +16.9%, the best of any group on the chart. While this performance is amazing, perhaps the most important fact is that they delivered 60% of Relevant Retail’s sales increase in 2020 AND from 2019>2021.

I hope that you now see why I chose to expand my overview. There is no doubt that the big retailers are critical to the success of the U.S. Retail Market. However, there are sometimes “hidden heroes” that should be noted.

The Top 100 outperformed the overall market in 2020 but not in 2021. In fact, the sales growth since 2019 trails Total Retail, Relevant Retail and even Rest/Auto/Gas. It still accounts for 35.8% of Total U.S. Retail $ so it is still critically important. We also should remember that the Top 100 is really a contest with a changing list of winners. Companies drop out and new ones are added. This can be the result of mergers, acquisitions, surging or slumping sales or even a corporate restructuring. In 2021, Speedway was acquired by 7-Eleven but 7 other companies dropped off the list.

  • Guitar Ctr • GameStop    • UNFI (Suprmkt)   • Grocery Outlet (Suprmkt)    • Belk (Dept Str)   • Sears    • AMPM (Conv)

On the plus side, PetSmart split into 2 separate companies – Chewy & PetSmart. L Brands also split as they now have separate listings for Bath & Body Works and Victoria’s Secret. Also, 6 new companies were added.

  • Harbor Freight (Hdwe) • Hudson’s Bay (Dept Str)   • Tapestry (Home Gds)   • RH (Restoration Hdwe) (Home Gds)
  • Urban Outfitters (Apparel) • Barnes & Noble (Books)

I think that we now have a good overview of U.S. Retail and the Top 100 so let’s ask and answer a very relevant question. How many Top 100 companies are buying and selling Pet Products? This will reinforce that Pets have become an integral part of the American Household and how fierce that the competition for the Pet Parents’ $ has become.

  • We should note that the data in the chart reflects the performance of the companies in the 2021 list since 2019 and is not being compared to the Top 100 list of companies from prior years
  • 85 are selling some Pet Products in stores and/or online. 2 of the companies added pet products to their offerings for the 1st time in 2021. Plus, 85 is 4 more companies than the 2020 list.
    • Their Total Retail Sales of all products is $2.56 Trillion which is…
      • 0% of the total business for the Top 100
      • 4% of the Total Retail market and 55.4% of Relevant Retail – from 85 Companies who sell Pet Products.
    • 72 Cos., with $2.39T sales sell pet products off the retail shelf in 162,495 stores – 9,000 more than 2020.
      • As you can see by the growth in both sales and store count since 2019, “in store” is still the best way to sell pet.
    • Online only is another story and the story gets complicated.
      • Amazon includes Whole Foods, which has stores so the Amazon $ are in the “Pet in Store” numbers.
      • 2 Retailers in the 2021 list added pet products to their offerings. This group had decreased sales and closed stores in 2020. Fortunately, 2021 brought a rebound in both areas, but especially in $ales.
    • The group not selling pet products, led by electronics retailers like AT&T and Dell as well as specialty retailers like Signet Jewelers and Lulumon have had extraordinarily strong pandemic sales growth, especially in 2021. However, overall, the group continues to close stores. Perhaps, more of them with see Pet as a new growth opportunity.

Pet products are an integral part of the strongest retailers and are widespread across the entire U.S. marketplace. Of the Top 100, 162,495 stores carry at least some pet items at retail. However, there are thousands of additional “pet” outlets including 15,000 Grocery Stores, 9,000 Pet Stores, 16,000 Vet Clinics, 5,000 Pet Services businesses and more. Pet Products are on the shelf in over 210,000 U.S. brick ‘n mortar stores… plus the internet.

Before we analyze the whole Top 100 list in greater detail let’s take a quick look at the Top 10 retailers in the U.S.

Although the rankings often change due to the current market factors, this group has been incredibly stable. The list is unchanged since 2013, with one slight qualification. In 2015 Albertsons purchased Safeway. The new Albertsons/Safeway group replaced the stand-alone Safeway company in the list. Now let’s get into the numbers.

  • Their Total Retail Sales were $1.56 Trillion which is:
    • 6% of Top 100 $ales, down from the 2020 peak (58.9%) but up considerably from 2019 (55.0%).
    • 8% of Relevant Retail, down from 35.5% in 2020 but about the same as 2019 (34.0%).
    • 0% of Total U.S. Retail $, down from 23.0% in 2020 but again about the same as 2019 (20.8%).
  • 2 Companies swapped rank – Costco & Kroger
  • Amazon leads the way but sales are up for all, with the biggest growth coming in 2020 for all but Costco & Drug Strs.
  • Store count was down for both years and -1.8% since 2019Driven by Kroger and the big Drug Chains.

These stores are truly essential to U.S. Consumers so it is no surprise that their influence peaked during the COVID crisis.

Now we will look at the detailed list of the top 100. We’ll sort it by retail channel with subtotals in key columns. For some channels there will be 2 subtotals. The subtotal in Blue compares the data history for just the 2021 list. The Black subtotal compares this year’s totals to those from previous year’s lists. We’ll then break it into smaller sections for comments. I have not done a lot of highlighting however:

  • Pet Columns ’21 & ‘20 – a “1” with an orange highlight indicates that products are only sold online
  • Rank Columns – 2021 changes in rank from the 2020 list are highlighted as follows:
    • Up 4-5 spots = Lt Blue; Up 6 or more = Green
    • Down 4-5 Spots = Yellow; Down 6 or more = Pink

Let’s get started. Remember, online $ are included in the sales of all companies.

Also Note:(*) in the 2019 columns of some previously unranked companies means the 2019 base was estimated from other data sources.

Observations

  • Alcohol Retailers first made the list in 2020 as consumers started dining at home. The behavior is continuing.
  • Apparel – They were hit hard by the pandemic but had a strong recovery in 2021. L Brands is now reported as 2 separate companies and Urban Outfitters was added. The overall loss of stores is coming from only 3 companies. BTW – The 2 companies that added Pet Products in 2021 are in the Apparel group – Ulta and Sephora
  • Auto – Growth in both years with the biggest lift in 2021. The only negative is that Advance Auto is closing stores.
  • Book Stores are back! Barnes & Noble made the list for the first time since 2015.
  • Commissary/Exchanges – They put outlet changes on hold, and they are losing revenue, especially in 2021.
  • Convenience Stores – 2020 & 2021 haven’t been very good for Convenience stores, especially those closely tied to Gas Stations. Speedway was acquired by 7-Eleven, but the combination has negative numbers across the board. AMPM dropped off the list. The only gains are coming from Casey’s, Circle K and Shell.
  • The decline in Department Stores was accelerated by the pandemic. Sales rebounded in 2021 but only Dillard’s is ahead of 2019. Two chains dropped off the list, Belk and Sears. Sears has been a fixture in U.S. Retail since they began a mail order catalog in 1893. Now, their demise seems to be getting closer. There is some good news as Hudson’s Bay made it back to the Top 100. By the way, Kohl’s is the only company increasing their number of stores.
  • Drug Stores – This group is essential but because visit frequency is low, changes in sales are generally small. The biggest lifts happened in 2021. Good Neighbor Pharmacy is the only group with a sales decrease since 2019. This was largely due to a reduction in stores. This trend is almost universal in the category as only Rite Aid added stores.

Observations

  • Electronics/Entertainment – Strong growth in 2020 which continued in 2021. Overall store count declined in both years. Gamestop dropped out in 2021 and Amazon Web Services revenue was removed from their Retail $ in 2020.
    • Amazon Retail growth was strong in 2021, +16.3% but it was only half of the +33.7% in 2020. In terms of brick ‘n mortar, their Whole Foods division continues to add stores.
    • The sales pattern was different for the others on the list. The 2021 lift generally exceed the increase in 2020. Only Qurate had a sales decrease in 2021 but they are still up vs 2019. Only Verizon sold less in 2021 than in 2019.
    • Regarding store count, Best Buy, AT&T and Verizon reduced their number of stores in both 2020 and 2021.
  • Farm – Tractor Supply continues their strong pandemic sales growth and is opening new stores at a steady rate.
  • Hobby & Crafts – Quite frankly, Hobby Lobby is the story in this group. While both companies are up in sales vs 2020 & 2019. The vast majority of the $ increase and 100% of the lift in store count were driven by Hobby Lobby.
  • Home Improvement/Hardware – This group is incredibly positive as the only negative on the chart comes from True Value closing a few stores. The data reinforces that consumers focused on their homes, especially in 2020.
    • Harbor Freight is growing fast and in 2021 earned a spot in the Top 100.
    • Sales were up vs 2020 across the board with the biggest $ lifts coming from the 3 biggest guys & the newcomer.
    • We should also note that the biggest % increases in $ since 2019 came from the same group.
    • It is also a very healthy sign when 6 of 7 companies are adding more stores.
  • Jewelry – Consumers obviously turned their attention to looking good, especially in 2021. However, if they bought from Signet, they had fewer brick ‘n mortar outlets available.
  • Mass Merchants have 3 of the 7 largest volume retailers in America – Wal-Mart, Costco and Target. Prior to the pandemic Wal-Mart & Costco usually drove the growth in this channel. In 2021 we need to add Target to this group.
    • In 2021 Wal-Mart had a 6.9% increase in sales, which is by far the lowest of the Big 3 and about the same as 2020. Their SuperCenter business was essential, so store sales increased, and their online sales took off. However, “regular” Discount Department Stores are losing market share. This impacts both Wal-Mart and Target so many outlets are adding more fresh groceries. They closed 100 stores in 2020. They opened 75 in 2021
    • Costco had a strong increase in growth, +15.8% compared to +9.3% in 2020. They are also regularly opening more new stores, +3.5% since 2019.
    • Target posted a 5th consecutive sales increase in 2021, +13.3%. This was down from +19.8% in 2020 but it pushed their lift from 2019 up to +35.6%, the largest in the entire group. They are also opening new stores and rapidly adding more fresh groceries to their Discount stores to enhance their consumer appeal.
    • Meijer has the lowest growth in sales since 2019, 13.3% but the highest rate of store growth, +5.3%. Most of the growth in $ and stores occurred in 2020.
    • BJ’s sales were up +8.0% in 2021. This is less than half of the +17.0% in 2020 but it was the 4th consecutive increase after a string of annual declines from 2013 to 2017. They also continue to strongly add more stores.

Observations

  • Office Supply Stores – This channel continues its consistent decline as Consumers maintain their move to online ordering of these products. The drop in store count is also regular but even more severe, -13.0% since 2019.
  • Pet Stores showed even stronger growth in 2021. Sales were up $4.0B (+22.3%) from 2020 and +35.6% from 2019. Most of the growth appears to be coming from online sales.
    • In this year’s report, the sales from Chewy and PetSmart are reported individually as they are now separate companies. I included a PetSmart/Chewy listing to show the total sales for the “group” from 2019 to 2021.
    • With the strong consumer movement to online purchasing, Chewy is the big story in this channel. Their growth got even stronger in 2021, +24.4% producing a net gain of 44.8% from 2019.
    • PetSmart’s growth is getting stronger, +23.1% in 2021, almost matching Chewy. They are also expanding their retail footprint, with a 2.9% increase in stores since 2019.
    • Petco’s growth since 2019, +30.5% is slightly ahead of PetSmart. Although the biggest lift came in 2021, +17.6% the growth is slightly more balanced. The big difference is that Petco cut back on their retail stores, especially in 2020. Their 2021 store count is down -7.9% from 2019.
  • Small Format Value Stores – These stores offer both value and convenience, but their appeal peaked in 2020.
    • Their sales increase fell to +2.0% from +15.5% in 2020 but the store count continues to grow, +8.6% from 2019.
    • Dollar General’s sales growth, slowed from +21.6% to +1.5% but store growth stayed at 6%.
    • Dollar Tree led in $ growth, +3.1% & added 3.1% more stores. But their growth since 2019 is ½ Dollar General’s
    • Big Lots’ $ fell slightly from 2020, -0.8% but are still +15.6% from 2019. They added stores in both 2020 & 2021.
  • Sporting Goods – The rates were mixed but all companies increased sales in both 2020 and 2021. The overall store count also grew in both years but the biggest increase in both areas came in 2021.
    • The biggest sales lifts in 2021 and since 2019 came from Dick’s and Academy.
    • Camping World finished 3rd in sales growth from 2019 but led the way in store openings.
    • The only 2 negatives came in store count – Bass Pro in 2020, producing a 3% drop since 2019 and Dick’s in 2021.
  • Supermarkets – The food “binge buying” was over so the 2021 sales increase fell to +1.6% from +10.6% and 2 companies dropped off the list – UNFI and Grocery Outlet. However, there are still 22 Supermarkets in the Top 100.
    • In 2020 only Southeastern sold less. In 2021 there were 6 companies with decreased sales.
    • 6 companies also cut back on stores producing a net drop of 650 stores from the 2020 list.
    • With $490B in sales from 16,621 stores, all carrying Pet Products on their shelves, this group is truly essential – both to the overall U.S. Retail Market and the Pet Products Industry.

Wrapping it up!

This report is focused on 2021 but we can also see the evolving impact of the pandemic. In 2020 it caused trauma for many retailers as non-essential stores were hit with restrictions and closures. On the plus side, consumers turned their focus to essentials and their homes. This helped drive incredible growth in many retail channels.

In 2021 the Total Retail market moved into a full recovery with spectacular growth. Many channels showed a strong sales rebound from 2020. Others built upon their pandemic success while many returned to a more normal growth pattern. However, a few continued to decline. The Top 100 companies had participants in all of these patterns.

The Top 100 is a contest with the winners changing slightly every year. It is a critical part of the U.S. Market, accounting for about 60% of Relevant Retail Revenue and almost 40% of the Total Retail Market. However, the pandemic also impacted the overall influence of the group in the marketplace.

Sales increased annually but the Top 100’s share of Total Retail peaked in 2020 and has steadily declined in Relevant Retail. It turned out that the Top 10 (Consistent annual growth) and #11>100 (Down in 2020, up in 2021) have radically different sales patterns. We also found a new hero – Relevant Retail not in the Top 100. The small guys can also lead.

Pet Products are an important part of the success of the Top 100. 85 companies on the list sell Pet Products in 162,495 stores and/or online. The 72 companies that stock pet products in their stores generated $2.39T in total sales. How much was from pet? Let’s “Do the math”. If we take out the $22B done by PetSmart & Petco, and the remaining companies generated only 1.7% of their sales from Pet, we’re looking at $36.9B in Pet Products sales from only 69 “non-pet” sources! (The 1.7% share for Pet is an estimate based on the last Economic Census.) If you add Pet Stores back in, Total Pet Products sales for the Top 100 are $57.5B. The APPA reported $78B in Pet Products sales for 2021. That means 69 mass market retailers accounted for 47.3% of all the Pet Products sold in the U.S. and 72 Top 100 companies generated 73.8%. Pet Products are widespread in the retail marketplace but the $ are concentrated. All Pet Industry participants should monitor the Top 100 group.

Retail sales $ are increasing in 2022 but runaway inflation has now become a major factor. We’ll see what changes that this unexpected situation brings to the retail market and the Top 100.

The Top 100 is an important part of U.S. Retail I hope that this detailed look help put this group into better perspective.