Archive for category: Pet Market Distribution Channels

Commodities inflation rose in August & September. This was largely due to a big increase in Gasoline prices. Inflation slowed for most product expenditures. Although down from its peak, inflation is still impacting consumer spending. The sales increase rate is lower than the inflation rate in a number of channels, which indicates a drop in the amount of product sold. A recovery may have started but there is still a long road ahead, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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 will begin with the August Final Report and then go to the Advance Report for September. 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’ll focus on Pet Relevant Channels.

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

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month 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 August Final. All but Restaurants were up from July and all, but Gas Stations were up vs 22, 21 & 19. When you consider inflation, the # of real drops vs 22 & 21 (8) was down from July (10). Gas Stations are still really down vs 2019. A significant fact to note is that Relevant Retail is again “really” up monthly vs 22. (All $ are actual, Not Seasonally Adjusted)

The August Final is $3.2B more than the Advance report. Specifically, Restaurants: +$0.4B; Auto: +$0.4B; Gas Stations: +$1.2B; Relevant Retail: +$1.2B. $ were up from July in all but Restaurants but actual sales for all but Gas Stations were positive in all measurements vs 22, 21 & 19. Deflated, but now rising prices caused Gas Stations sales to again drop monthly & YTD vs 22. There were 8 “real” sales drops, 5 vs 21. Restaurants have the most growth and are the only group with all positives. Monthly real sales for Relevant Retail vs 22 are up but have been down in 15 of the last 18 months. Their YTD real measurements vs 22 & 21 are both negative. They are the top “real” performer vs 2019 but only 48% of the growth is real.

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

Overall– 9 were up from July, but vs 22, 7 were up vs August and 10 YTD. 5 were “really” down monthly & 7 Ytd. Vs 2021, 10 had increases but only 6 monthly & 3 Ytd were real. Vs 2019, Off/Gift/Souv & Disc Dept Strs were really down.

• Building Material Stores – The pandemic focus on home has produced sales growth of 34.9% since 2019. Prices for the Bldg/Matl group have inflated 19.9% since 2021 which is having an impact. HomeCtr/Hdwe stores are down monthly & Ytd vs 22 but up vs 21 &19. Farm Stores are up in all measurements but vs Aug 22. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 20.6% 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: 7.2%, Real: 1.2%; Farm: 11.4%, Real: 5.2%
• Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation has flipped as the Grocery rate is now 33% lower than Drug/Med products. Drug Stores are positive in all measurements and 73% of their growth since 2019 is real. While the $ are up for Supermarkets, except vs Aug 22 their 23 real sales are down vs 22 & 21 and just slightly positive vs 2019. Only 6% is real growth. Avg 19>23 Growth: Supermarkets: +6.2%, Real: +0.4%; Drug Stores: +5.6%, Real: +4.1%.
• Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up from July and are actually & really up vs 2022 and 2019. Vs 2021, real & actual $ vs August are up. YTD is down. Prices are still deflating -1.2%, a big change from +5.4% in 21>22 and +6.5% in 20>21. The result is that 59% of their 42.2% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.2%; Real: +5.7%.
• Gen Mdse Stores – All were up vs July and actual sales vs 22, 21 & 19 were up for all but Disc Dept Stores vs August 22. In real sales both SupCtr/Clubs & $/Value Stores were up vs Aug 22 & 21 and $ stores were also up YTD vs 22. Disc Dept Stores are the worst performer and are the only real negative vs 2019, -1.6%. The other channels average 35% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.2%, Real: 2.2%; $/Value Strs: +6.7%, Real: +2.7%; Disc. Dept.: +2.3%, Real: -0.4%
• Office, Gift & Souvenir Stores – Actual sales are up 0.2% from July but down vs August 22 & 21. They were up in YTD measurements vs 22, 21 & 19. Their real sales numbers are all negative including -7.4% Ytd vs 2019. Their recovery started late, and their slow progress appears to have stalled in Jun>Aug. Avg Growth Rate: +0.7%, Real: -1.9%
• Internet/Mail Order – Sales are up from July and still above $100B at $105.6B – another record for the month. All measurements are positive, but their growth is only 49% of their average since 2019. However, 79% of their 96% growth since 2019 is real. Avg Growth: +18.3%, Real: +15.2%. As expected, they are still 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 23, grew Mar>May, then fell in Jun>Aug, However, all measurements except actual & real vs August 2022, are positive. They are still the % increase leader vs 2021 (barely) and 71% of their 54.3% growth since 2019 is real. Average 19>23 Growth: +11.5%, Real: +8.5%. They are still 2^nd in growth since 2019 to the internet. Pet Stores are definitely contributing.

Inflation remains an important factor in Retail. In actual $, 7 channels reported increases in sales vs 2022 and 10 vs 2021. When you factor in inflation, the number with “real” growth drops to 6 vs 2022 and vs 2021. Inflation’s impact may be slowing but it is still lowering sales increases. The August lift vs 2022 was still only 50% of Jan/Feb. The impact is also visible in specific retail channels. The overall CPI stabilized in September but most product expenditures deflated. Let’s look for any impact in the Advance Retail $ales

The big change from August is that all channels, big and small, had a sales decrease from last month. This is 8 straight years for an Aug>Sep decrease in Retail $. This has happened in 18 of the last 23 years so it is normal. Prior to 2001, there was almost always an increase. The avg drop since 2001 is -4.9% so 2023 is a little bigger. On the plus side, all actual $ measurements are again positive vs 22, 21 & 19 for all big groups but Gas Stations. However, you will also see that the lifts vs 2022 are still low. Inflation is a big factor. The national CPI stabilized at 3.7% but the all commodities rate, which is the best pricing measure for Total Retail, rose from 1.0% to 1.4%. This lift was largely driven by rising gasoline prices. Inflation slowed for most Product expenditures. Remember, back in June & July, commodities prices actually deflated from 2022. Again, this was largely driven by Gasoline prices, which were down over 20%. There is some significant “real” good news. The groups have 20 “real” sales measurements vs 22 & 21. In September, only 6 were negative and 4 of those came from Gas Stations. Relevant Retail’s real monthly sales vs 22 has now been positive for 3 straight months. Note: The monthly % lift vs 22 for Relevant & Total Retail is less than half of Jan & Feb levels

Overall – Inflation Reality – Gas prices turned up, but Auto prices are still down vs 22. For Total & Relevant Retail, the rate was again below the sales lift. For Restaurants, inflation remains high, +6.0% but they are really positive vs 22 & 21. Monthly real sales for Relative Retail vs last year are positive again. That’s 4 of the last 5 months but only 4 of the last 19. Also, their Ytd Real sales are now only down vs 2022. They continue to make slow progress.

Total Retail – Since June 2020, every month but April 23 has set a monthly sales record. December 22 $ were $748.9B, a new all-time record. Sales have been on a rollercoaster. After lifts in July & Aug, they fell in September. Inflation is only 1.4% but sales growth is still low. Sales are up 3.4% vs last year. That’s only 43% of their average 19>23 growth. All real sales measurements are now positive but only 34% of the 19>23 growth is real. Inflation in Total Retail has radically slowed vs 2022 but we still see its cumulative impact. Avg 2019>23 Growth: +7.9%, Real: +3.0%.

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 1^st time. They have the biggest increases vs 22, 21 & 19 and all real sales are positive. Inflation slowed to 6.0% from 6.5% last month but is still +14.8% vs 21 and +21.9% vs 19. 38.1% of their 40.9% growth since 19 is real but they remain 2^nd in performance behind Relevant Retail. Recovery started late but inflation started early. Avg 2019>23 Growth: +8.9%, Real: +3.7%. They just account for 13.2% 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 21>22. 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. $ grew in Jan>Feb, fell in Mar>Apr, grew in May, fell in Jun>Jul, grew in Aug, then fell in Sep. Only Ytd real sales vs 21 are negative. Prices vs 22 are -2.3% monthly & -1.5% Ytd but only 7% of 19>23 growth is real. Avg 2019>23 Growth: +6.7%, Real: +0.5%.

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 23, strongly dropped in Mar>Jul to -20.2%. In August they turned up to -3.7%. In September, they are +2.7% and +21.9% vs 21. Pricing is a big factor in the monthly & Ytd sales drops vs 22. Real sales vs 22, 21 & 19 are now down monthly & YTD.  Avg 2019>23 Growth: +6.5%, 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 then grew in March, starting another roller coaster. Sales fell in Jun>Jul, turned up in Aug, then fell in Sep. All actual sales are up vs 22, 21 & 19. Real sales are only down Ytd vs 22. Monthly Real sales vs last year are again positive. That’s 4 of the last 5 months, but only 4 of the last 19. 48% of their 19>23 growth is real – #1 in performance. Avg 2019>23 Growth is: +8.3%, Real: +4.3%. This group is where America shops. Another month of positive real sales is a good sign.

Inflation is still relatively low but the cumulative impact is still there. Sales increases are still low, but the fact that 88% of all Non-Gas Station real sales numbers vs 22 & 21 are positive is a good sign. Restaurants are still doing well, and Auto is improving. Inflation/Deflation has caused a drop in Gas Stations’ actual sales. Our biggest concern is Relevant Retail. Their situation is improving. Ytd real sales vs 22 are still negative, which shows the impact of cumulative inflation, but monthly real sales vs 22 have now been positive in 4 of the last 5 months. A slow turnaround appears to be continuing.

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

• Relevant Retail: Avg Growth Rate: +8.3%, Real: +4.3%. All were down from August but 5 were up vs 22 & 8 vs 21. Only 4 had a “real” increase vs 22 & 5 vs 21. Inflation continues to slow sales increases.
• All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are down from August and for all comparisons but Ytd vs 21 & 19. Their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +0.2%, Real: -2.5%.
• Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are down from August but up in all other measurements. Their real sales are up in all measurements but Ytd vs 22 & 21. Only 36% of their 28.2% 19>23 lift is real – the impact of inflation. Avg Growth: +6.4%, Real: +2.4%.
• Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are down from August 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 6.2% of the growth since 2019 is real. Avg Growth: +6.2%, Real: +0.4%.
• Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from August but positive in all other measurements, actual and real vs 22, 21 & 19. Their inflation rate has been relatively low so 73% of their 25.2% growth from 2019 is real. Avg 2019>23 Growth: +5.8%, Real: +4.3%.
• Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual $ales are down from August but up vs 22, 21 & 19. Their real sales are now down monthly vs 22 & 21 and Ytd vs 22. However, 64% of their 19>23 growth is real. Avg 2019>23 Growth: +3.9%, Real:+2.5%
• Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were very high in 2022. Sales are down from August and negative in all other measurements but actual Ytd vs 2019. Their real sales are even down -2.7% vs 2019. Avg 2019>23 Growth: +3.3%, 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. $ales are down from August and in all measurements but Ytd vs 19. However, consistent deflation has caused real sales to be up in all measurements. Avg 2019>23 Growth: +0.5%, Real: +2.6%.
• 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. Inflation is still high at 6.3%. Sales are down from August and they are again all negative vs 2022. They still have the highest Inflation of any channel so real sales are negative in all but Ytd vs 2019. Also, just 21% of their sales growth since 2019 is real. Avg 2019>23 Growth is: +7.8%, Real: +1.8%.
• 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. Actual $ales are down from August, but positive for all but vs Sep 22. Real sales are down for all but YTD vs 22 & 19. Prices deflated again and their inflation rate has been lower than most groups so 66.1% of their 29.8% growth since 2019 is real. Avg 2019>23 Growth: +6.7%, Real: +4.6%.
• 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 vs August but positive in all but vs Sep 22. Real sales are only down vs Sep & Ytd 22. They are 2^nd to NonStore in increases vs 21 & 19. 65% of their 41.8% 19>23 growth and 46% of their 21>23 growth is real. Their Avg 19>23 Growth is: 9.1%, Real: 6.2%.
• 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 as sales exceeded $100B for the 1^st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are down from August but all other measurements are up. 78% of their 87.2% growth since 2019 is real. Their Avg Growth: +17.0%, Real: +13.8%.

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. Despite the recent uptick in Commodities prices, inflation has slowed considerably from its peak in June 2022, which should help the Retail Situation. Sales were down from August for all groups & channels. Inflation is slowing in many channels and even deflating in a few. However, some channels like 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 even below the lower inflation rate. Real monthly sales for Relevant Retail have been positive vs 22 for 4 of the last 5 months but are still negative for 7 of 11 channels. The turnaround for Relevant retail is not widespread. It is primarily being driven by NonStore with a little help from Health Care. September was truly a mixed bag of pluses and minuses compared to August. We still have a long way to go for a full recovery from the inflation tsunami.

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?

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.

The U.S. Retail market reached $8.07 Trillion in 2022 from all channels – Auto Dealers, Supermarkets, Restaurants, Online retailers and even Pet Stores. The $705B, +9.6% lift was down significantly from the pandemic recovery of +$1.14T, +18.4% in 2021. However, the Total Retail market is now $1.9T, 30.8% ahead of 2019. That’s a strong annual growth rate of +9.4%. (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). The historical data for some companies that weren’t in the Top 100 all years from 2019>2022 was gathered from other reliable sources. In 2020, Restaurants were removed from the list and only Convenience stores sales for Gas Stations were included. I adjusted the 2019 list to reflect this change. This change means that the Top 100 now only includes Relevant Retail companies. The Top 100 account for 35.2% of the total market. This share peaked at 39.0% during the 2020 pandemic and has slowly declined since then. However, the Top 100 are still the “Retail Elite”. The vast majority of the group also stock and sell a lot of Pet Products so their progress is critically important to the Pet Industry. 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.

We will begin our report with an overview chart of the 2019>2022 annual sales history for major segments of the Retail Marketplace. The U.S. Retail market has strongly recovered from the 2020 pandemic trauma and the resurgence has become widespread across most channels. Our regular retail sales reports have shown that different defined retail channels often took a different path from 2019 to 2021. In the Spring of 2021 and throughout 2022 the retail market faced a new challenge – strong inflation. The YOY price increases were the largest in decades, even reaching double digits near the end of 2021. The high rate didn’t start to slow until the Fall of 2022. The Top 100 analysis allows us to see if the company revenue size was a factor in their overall pandemic/price journey from 2019>2022. The following chart shows the annual sales and market share as well as the changes in both for large retail subgroups that are based upon the amount of their annual revenue. Note: In comments we’ll show Avg Growth Rates – Actual & Real (Inflation Related)

• The Total Retail Market grew $705B, +9.6% in 2022. That is less than the $1.14T, +18.4% in 2020. However, the growth rate since 2019 is 9.4%, which is still double the rate of recent years: 2019, 3.6%; 2018, 4.9%; 2017, 4.3%. Factoring in inflation, Real 19>22 growth was +3.4% compared to 18>19: +3.2%; 17>18: +3.0%; 16>17: +5.7%
• The “Non-Relevant” Retail Group (Restaurants, Auto Dlrs, Gas Stations) was hit hardest by the pandemic as sales fell -9.7% in 2020. However, they had a strong recovery as 20>22 sales grew $932B, producing an average 19>22 growth rate of 8.8%. However, high inflation was a factor for all groups. Gas Stations led the way as 19>22 prices were up +50.2%.
• Relevant Retail was the hero of the pandemic as they kept Total Retail positive in 2020. Their sales surged in the 2021 recovery then the increase slowed to +8.0% in 2022. They were still up $365B producing an average growth rate since 2019 of +9.75%. Their Real growth rate (considering inflation) was +5.75%. However, their share of Total Retail has fallen 3.5% after peaking in 2020. The story is a bit more complex. Let’s drill deeper into this group.
• The Top 100 Retailers make up 57.5% of Relevant Retail and 35.2% of Total Retail. They have shown consistent growth since 2019 but their market share has fallen since peaking in 2020 for Relevant Retail and 2019 for Total Retail. Their avg growth since 2019 is +7.1%, but Real Growth using the latest Top 100 CPI data is +3.6% – 51%.
• The biggest subgroup in $ales in the Top 100 is the Top 10 which accounts for 59% of the Top 100’s revenue, up from 55% in 2019. 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 which was their peak in Retail market share. Their average growth rate since 2019 is +9.5%. The group is unchanged, so we know their Real growth was +5.7% – 60%.
• The Retailers ranked from #11 to #100 change slightly every year. Their sales in 2022 ranged from $3.7B to $76B 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 but that fell to 6.1% in 2022. They have also lost market share in Total & Relevant Retail every year since 2019 but are still a big part of U.S. Retail. Avg 19>22 Growth: +3.9%; Real: 1.0% – only 26%.
• 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. They had the biggest percentage increase of any Relevant Retail subgroup in all measurements since 2019. Their avg. increase since 2019 is +13.8%. Real: +9.8%, the best numbers of any group on the chart. While this performance is amazing, perhaps the most important fact is that they delivered 62% of Relevant Retail’s sales increase in 2020 and even 56% of the lift from 2019>2022.

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 Total Retail in 2020 but not in 2021 or 2022. In fact, the sales growth since 2019 trails Total Retail, Relevant Retail and even Rest/Auto/Gas. It still generates 35.2% of Total U.S. Retail $ so it is still very 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 2022, Smart & Final was acquired by Chedraui and Price Choppers merged with Tops. 4 dropped off:

• Bed, Bath & Beyond (Home Gds) • Restoration Hdwr (Home Gds)   • Save Mart (Supmkt)   • Urban Outfitters (Appar)

On the plus side, 4 new companies were added.

• Amway (Home Gds) • Raley’s Supermarkets (+Bashas’)   • Neiman Marcus (Dept Str)  • Schnucks (Supmkt)

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 only reflects the performance of the companies in the 2022 list since 2019 and is not being compared to the Top 100 list of companies from prior years
• 87 are selling some Pet Products in stores and/or online. 2 of the companies added pet products to their offerings for the 1^st time in 2022. Plus, 87 is 7 more companies than the 1^st “official” all Relevant Retail Top 100 list in 2020.
  • Their Total Retail Sales of all products is $2.74 Trillion which is…
    • 96.4% of the total business for the Top 100
    • 55.4% of Relevant Retail
    • 34.0% of the Total Retail market
  • 74 Cos., with $2.58T in sales sell pet products off the retail shelf in 165,205 stores – 12,000 more than 2020.
    • 1 company on the current list added pet products to their shelves in 2022.
    • 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.
    • 1 Retailer in the 2022 list added pet products to their offerings. This group had decreased sales and closed stores in 2020. Fortunately, 21 & 22 brought a rebound in both areas, but they still have the lowest 19>22 increase in $.
  • Some non-pet specialty retailers like Lulumon and Signet have had extraordinarily strong post pandemic growth. However, the growth in the non-pet group has generally slowed in 2022. They have also closed 5% of their stores, which is now thankfully on hold. Perhaps, more of them will see Pet as a new growth opportunity.

The pandemic caused our Pets to become an even more important part of our households. They are truly family. Pet products have long been an integral part of the strongest retailers and are now even more widespread across the entire U.S. marketplace. Of the Top 100, 165,205 stores carry at least some pet items at retail. However, there are thousands of additional “pet” outlets including 15,000 Grocery Stores, 10,000 Pet Stores, 16,000 Vet Clinics, 6,000 Pet Services businesses and more. Pet Products are on the shelf in over 215,000 U.S. brick ‘n mortar stores… plus the internet. Pet Products have become part of the new “normal” for the majority of U.S. Retailers.

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.

Except for changes in rank, this group has been incredibly stable. The list has been the same 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. There is one change to the chart. We have added average annual 19>22 growth rates – both Actual & Real (Inflation was factored in using specifically targeted CPIs) Now let’s get into the numbers.

• Their Total Retail Sales were $1.67 Trillion which is:
  • 58.8% of Top 100 $ales, about equal to the 2020 peak (58.9%) but up considerably from 2019 (55.0%).
  • 33.8% of Relevant Retail, down from 35.5% in 2020 but about the same as 2019 (34.0%).
  • 20.7% of Total U.S. Retail $, down from 23.0% in 2020 but exactly the same as 2019 (20.7%).
• In ranking, Kroger & Home Depot swapped places. Walgreens fell from 6^th to 8^th, so Target and CVS moved up.
• Sales vs 21 & 19 are up for all but Walgreens. The biggest growth vs 21 came from Costco but Amazon is still the leader vs 19. In average growth, 5 have rates over 10%. The group averages +9.5% with +5.7% (60%) being real.
• Store count stabilized and turned up 0.3% in 22 but is still down vs 19 for 5 companies and -0.1% for the group.

Now we’ll look at the detailed list of the top 100. It is sorted by channel groups with subtotals in key columns. For some groups there will be 2 subtotals. The subtotal in Blue compares the data history for just the 2022 list. The Black subtotal compares this year’s totals to those from previous year’s lists. Note: I used the same CPI rate for both Blue & Black Real averages because there was little difference in group share from 2019 to 2022.  There is not a lot of highlighting, but:

• Pet Columns ’22 & ‘21 – a “1” with an orange highlight indicates that products are only sold online.
• Rank Columns – 2022 changes in rank from the 2021 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.

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

Observations

• Alcohol Retailers first made the list in 2020 as consumers started dining at home. The behavior is accelerating.
• Apparel – They were hit hard by the pandemic, had a strong recovery in 2021, then the increase slowed in 2022. In 2022 sales decreased for companies focused on clothing while it increased for specialty and accessory stores. The average increase for the 22 group was Actual: +5.5%; Real: +4.8% (87%). Their performance differed from that of the category because the 2022 group had fewer companies than 2021 but more than 2019.
• Auto – Growth slowed a little in 2022 but the only negative for this group is that Advance Auto’s average Real Sales growth is down -1.4% from 2019. Group Avg Growth: +9.8%; Real: +3.6%.
• Book Stores – Barnes & Noble has had slow steady growth since 2019 and low inflation so 52% is real.
• Commissary/Exchanges – They have been on hold since 2019. Sales grew a little in 22 but real sales growth is -5.7%.
• Convenience Stores – Sales are up in 22 but most of the growth is due to 7-Eleven’s acquisition of Speedway. The 22 group has 8.0% average growth but only 24% is real. However, that’s much better than -4.9% for the category.
• The decline in Department Stores was accelerated by the pandemic. Sales in the category grew in 22 because of the addition of Neiman Marcus. Neiman Marcus’ sales are up slightly from 2019 but Dillard’s has the only significant actual and real growth since 19. Both the 22 group and the category are both actually and really down vs 2019. J.C. Penny, a hallmark in the department store channel, has by far the worst performance.
• Drug Stores – All but Walgreen’s increased sales in 2022 but the store closures continued. Vs 2019 only Walgreen’s and Good Neighbor Pharmacy have reduced sales but all have fewer stores. The average growth rate since 2019 is low at +2.7% but inflation is low so real growth is +2.1% (78%)

• Electronics/Entertainment – Sales Growth slowed in 22 and even fell for 3 companies. Store closures continued for electronics retailers.
  • Amazon Retail growth slowed in 22 to only 36% of their average growth since 2019, but 85% is Real.
  • Qurate was down for the year and the only company down vs 2019. Their avg real sales growth from 19 is -6.5%.
  • 2 Electronics stores are down vs 2021 but all are up vs 2019. They continue to close stores. However, strong deflation has even pushed real sales significantly above actual.
  • 22 group avg growth: +12.0%;Real: +12.5%. This is much better than the category because 22 is a smaller group.
• Farm – Tractor Supply growth slowed but is still +11.4%. Avg Growth: +19.1%; Real: +13.8% (72%). Plus, more stores.
• Hobby & Crafts– Hobby Lobby is the best performer, but both companies are up in all measurements. Avg Group Growth: 5.9%; Real: +5.4%. 92% is real.
• Home Improvement/Hardware – Growth slowed in 2022 but the only negatives on the chart come from True Value closing a few stores in 21 and the -1.6% real sales avg for Menards. Consumers are still focused on their homes.
  • Harbor Freight is still growing fast. They earned a spot in the Top 100 in 2021.
  • Vs 2021 & 2019 sales were up for all across the board with the biggest $ lifts coming from the 3 biggest guys.
  • It is also a very healthy sign when 6 of 7 companies continue to add more stores.
  • 22 Group Avg Growth: +11.5%;Real: +6.3% (55%). The category is slightly better because the group # is up by 1.
• Jewelry – Signet switched from closing to opening stores. Strong growth continues. Avg: 21.2%; Real: 18.7% (88%).
• Mass Merchants have 3 of the 7 largest volume retailers in America – Wal-Mart, Costco and Target. However, the value and selection offered by the whole group has increased its importance to consumers even more due to the pandemic.
  • In 2022 Wal-Mart $ were up 8.7%, better than 6.9% in 2021 and above their average increase in sales: +7.7%. Their business is driven by SuperCenters. Groceries drove up inflation so their real sales avg increase was 3.7%, only 48%. They did stop closing discount department stores in 2022 but their store count is still -0.5% from 2019.
  • Costco’s 2022 $ increase was +16.9%, up from +15.8% in 2021 and 23% more than their 13.7% average. Average real growth was 9.7% (71%). They also continued to open new stores, +5.9% vs 2019.
  • Target posted a 6^th consecutive sales increase in 2022, +2.8%. However, this was down a lot from +13.2% in 2021 and their 11.7% average. Their real avg growth rate is 7.7%, 66%. Their store count is up 4.3% from 2019 as they are opening more supercenters. However, they are also adding more fresh groceries to their discount stores.
  • Meijer’s $ales were +5.6% from 21, up from 2.3% last year but below their avg of 6.1%. Their avg real growth is 2.1%, only 34%. Coincidentally, their avg growth rate from 2019 now exactly matches their 6.1% growth in stores.
  • BJ’s is now the growth leader, +22.8% vs 21 and +55.3% vs 2019. However, we should note that Costco ranks 2^nd in both comparisons. BJ’s also has 8.7% more stores than in 2019. Costco is +6.1%. BJ Avg growth: +15.8%; Real: +11.8%, 75%. Club stores have moved to the forefront.

• Office Supply Stores – This channel continues its consistent decline as Consumers maintain their move to online ordering of these products. The only positive on the chart is that Staples sales were up +0.6% from 2021. The group’s average sales growth since 2019 is -3.8%; Real: -10.4%. Store count is down even more, -17.3% from 2019.
• Pet Stores growth in 2022 was +7.3%, down significantly from +22.3% last year but they are up +45.5% from 2019. Most of the growth in all measurements is coming from online sales.
  • Chewy and PetSmart numbers are reported individually as they are now separate companies.
  • With the strong consumer movement to online purchasing, Chewy is still the big story in this channel. They have the most sales. Their 21>22 increase was +13.6%, down from 24.4% in 21, but 76% of the Pet Store group’s 2022 $ increase. Their 64.5% sales increase vs 2019 is also nearly double that of the retail outlets. Avg Growth rate: +18.0%; Real: +14.9%. 83% of their big increase is real.
  • PetSmart’s 21>22 growth was only +2.2%, 90% less than the +23.1% in 21. Sales are still up +32.5% from 2019 and they continue to expand their retail footprint with 3.4% more stores than in 2019. Their average growth rate is +9.8%. Real growth is +6.7%, 68%. This is not as good as Chewy’s, but still very good.
  • Petco’s growth since 2019, +35.8% is slightly ahead of PetSmart. It also slowed markedly in 2022 to +4.1%, from +17.6% in 21. Avg growth: +10.7%; Real: +7.6%, 71%. The biggest difference between the 2 is that Petco has cut back on their retail stores, even in 2022. Their store count is now down -7.7% from 2019.
• Small Format Value Stores – These stores offer value and convenience, but there are 2 types – Big Lots & $ Stores
  • Group sales grew +7.4%, up from +2.0% in 21. Avg 19>22 Growth: +8.2%; Real: +4.1%, 50%.
  • Dollar General & Dollar Tree were responsible for almost all of the group’s growth in both $ and stores. Dollar General was the leader in both areas. Avg Growth: +10.9%; Real: +6.9%, 63%. Dollar Tree also looked pretty good with 6.8% more stores and avg growth of +6.3%. However, their Real growth was +2.3%, only 37%.
  • Big Lots’ $ fell -11.1% from 21. Their store count is down -3.1% from 19. Avg $ Growth 19>22: +0.9%; Real: -3.1%
• Sporting Goods – Sales vs 21: +4.7%, down from +13.6% in 21. All but Academy were up vs 21 but all are up vs 19. The store count has also grown despite slight drops by Dick’s and Bass Pro. Avg $ Growth: +9.1%; Real: +4.7%, 52%.
  • Camping World has the best performance vs 21 & 19 in both $ales and store growth.
  • Dick’s had the biggest actual $ increase from 19>22 despite closing 1.9% of their stores since 2019.
  • Bass Pro has the worst performance. They closed 3.1% of their stores in 20&21. Avg Growth: +2.5%; Real: -1.9%.
• Supermarkets – As usual there was some turmoil. Because of a merger & acquisition 2 companies were replaced. 1 other dropped out and 2 new were added. Ave Growth: +7.0%; Real: 0.9%, only 13%. Store count -0.7% from 2019.
  • All were up vs 2021 in $ and only 2 were down vs 2019
  • 7 companies cut back on stores in 2022 and 8 have fewer stores than in 2019.
  • The category avgs and store count situation are better than for 2022 group because the group is bigger in 22.
  • With $540B in sales from 17K stores, all carrying Pet Products, this group is essential both to the Retail Market and the Pet Industry.

Wrapping it up!

This report is focused on 2022 but we can also see the still evolving impact of the pandemic. In 2020 many non-essential retailers 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.

In 2022 we were hit by strong inflation in many categories which slowed both actual and real growth.

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 almost 60% of Relevant Retail Revenue and 35+% of Total Retail. Sales have increased annually but the Top 100’s share of Total Retail peaked in 2020 and in 2019 for Relevant Retail and has steadily declined. The Top 10 has had consistent annual growth but sales in the #11>100 actually fell in 2020 and their 19>22 increase is only about 1/3 of the Top 10’s lift. However, we should remember that we discovered a new hero in 2021 – Relevant Retail, not in the Top 100. The 19>22 Sales by these smaller guys are +47%, 50% more than the Top 10. Their performance continues to be amazing.

Pet Products are an important part of the success of the Top 100. 87 companies (96.4% of $) sell Pet items in 165K stores and/or online. The 74 companies that stock pet products in their stores generated $2.58T in total sales. How much was from pet? Let’s “Do the math”. If we take out the $23.6B done by Top 100 Pet stores and the remaining companies generated only 1.7% of their sales from Pet, we’re looking at $43.4B in Pet Products sales from 71 non-pet sources! (The 1.7% Pet share is based on the Economic Census.) If you add Product sales for Pet Stores back in, Total Pet Products sales for the Top 100 are $67B. The APPA reported $89.6B in Pet Products sales for 2022. That means 71 mass market retailers accounted for 48.4% of all the Pet Products sold in the U.S. and 74 Top 100 companies generated 74.8%. Pet Products are widespread in the retail marketplace but the $ are concentrated. All Pet Industry participants should monitor the Top 100 group.

Retail sales increases slowed in 2022 as inflation became a major factor. The situation is still evolving but the Top 100 will always be a critical part of U.S. Retail. I hope that this detailed look helped put this group into a better perspective.

While inflation continues to slow, its cumulative effect on consumer spending is still being felt. The rate of sales increases is still slower than the decrease in inflation in a number of channels, which causes a drop in the amount of product sold. A recovery may have started but there is still a long road ahead, 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 will begin with the Final Report for May and then go to the Advance Report for June. 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 May Final. All were up from April, and all but Gas Stations were up vs 22, 21 & 19. When you consider inflation, the negatives were fewer than in April. However, Gas Stations are still really down vs 2019. The most significant change may be that Relevant Retail is now “really” up vs May 22. (All $ are Actual, Not Seasonally Adjusted)

The May Final is $2.8B more than the Advance Report. Specifically, Restaurants: +$1.4B; Auto: +$1.0B; Gas Stations: +$0.4B; Relevant Retail: N/C. Sales were up from April for all big groups and actual sales for all but Gas Stations were positive in all measurements vs 22, 21 & 19. Strong deflation caused Gas Stations sales to drop monthly and YTD vs 2022. There are some real sales drops, especially vs 2021. Restaurants have the most growth and are the only group with all positives. To reiterate, the most significant data may be that real sales for Relevant Retail vs May 22 are positive. They have been down for 7 straight months. They are #1 in performance since 2019 but only 48% of the growth is real.

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

Overall– All 11 were up from April, but vs 22, 8 were up vs May 22 and 10 Ytd. 6 were “really” down monthly & Ytd. Vs 2021, 9 had increases but only 4 monthly & Ytd were real. Vs 2019, only Off/Gift/Souv & Disc Dept Strs were really down

• Building Material Stores – The pandemic focus on home has produced sales growth of 35.7% since 2019. Prices for the Bldg/Matl group have inflated 20.8% since 2021 which is having an impact. HomeCtr/Hdwe stores are down for the month & Ytd vs 22 but up vs 21 &19. Farm Stores are up in all measurements. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 21.5% 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: 7.3%, Real: 1.3%; Farm: 11.3%, Real: 5.0%
• Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they have been very different in inflation. The gap is closing but the Grocery rate is still 32% higher than Drugs/Med products. Drug Stores are positive in all measurements and 73% 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 9% is real growth. Avg 19>23 Growth: Supermarkets: +6.4%, Real: +0.6%;Drug Stores: +5.0%, Real: +3.7%.
• Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up from April and are actually & really positive vs 2022. However, they are actually & really negative vs 21. Prices are still deflating -0.9%, a big change from +5.4% in 21>22 and +6.5% in 20>21. The result is that 60% of their 44.6% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.7%; Real: +6.1%.
• Gen Mdse Stores – All were up vs April and $ stores had the biggest lift. Actual sales vs 22, 21 & 19 were also up for all but Disc Dept Strs vs May 22 & 21. In real sales, the only positive was in Ytd sales for $/Value Stores vs 22. Disc Dept Stores are the worst performer and are now really down -0.1% vs 2019. The other channels average 34% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.2%, Real: 2.2%; $/Value Strs: +6.6%, Real: +2.6%; Disc. Dept.: +2.7%, Real: -0.01%
• Office, Gift & Souvenir Stores – Actual sales are up 10.9% from April but down from May 22. They were up in all other measurements vs 22, 21 & 19. Their real sales growth is down monthly vs 22 & Ytd vs 19. All other real numbers are positive. Their recovery started late but they are making slow progress. Avg Growth Rate: +0.9%, Real: -1.8%
• Internet/Mail Order – Sales are up from April and above $100B again at $105.3B – another monthly record. All measurements are positive, but their growth is only 43% of their average since 2019. However, 79% of their 97% growth since 2019 is real. Avg Growth: +18.5%, Real: +15.4%. As expected, they are still 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 Mar>May. (May was +18%) Ytd Real sales are down vs 22, but all other measurements are positive. They are still the % increase leaders vs 2021 and 71% of their 55.2% growth since 2019 is real. Average 19>23 Growth: +11.6%, Real: +8.7%. They are still 2^nd in growth since 2019 to the internet. Pet Stores are surely contributing.

Inflation remains an important factor in Retail. In actual $, 8 channels reported increases in sales vs 2022 and 9 vs 2021. When you factor in inflation, the number with any “real” growth drops to 5 vs 2022 & 4 vs 2021. Inflation has impacted sales increases. May was a strong month but the lift was still 30% less than in Jan & Feb. The impact is very visible at the retail channel level. Inflation has continued to slow. Let’s look at the impact on the Advance Retail $ales for June.

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. 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, fell in April, grew again in May, then dropped in June. Except for a decrease by Gas Stations, all actual sales are positive vs 22, 21 & 19. There is also some stability in that of the groups’ total of 20 “real” sales measurements vs 22 & 21, 11 are again positive, including monthly sales vs 22 for Relevant Retail. The biggest change is that the lift vs 2022 is notably smaller, especially for Relevant & Total Retail.

Overall – Inflation Reality – Total, Auto & Gas prices all deflated. For Relevant Retail, the rate was slightly below the sales lift. For Restaurants, inflation remains high, +7.6% but they still have the strongest performance vs 2022 & 2021. The biggest news is that monthly real sales for Relative Retail vs last year have been positive for 2 straight months after 7 consecutive negatives. However, their Ytd Real sales are still down vs 2022 & 2021. They still have a ways to go.

Total Retail – Since June 2020, every month but April 23 has set a monthly sales record. December 22 $ were $748.9B, a new all-time record. Sales dipped in Jan>Feb, rose in Mar, fell in Apr, grew in May, then fell in June. Inflation has become deflation, but sales growth is still low. Sales are up 1.7% vs last year. That’s only 21% of their average 19>23 growth. Also, real sales are down monthly and Ytd vs 21 and only 36% of the 19>23 growth is real. Inflation in Total Retail has radically slowed vs 2022 but we still clearly see its cumulative impact. Avg 2019>23 Growth: +8.0%, Real: +3.1%.

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 1^st time. They are the best performing big group vs 22 & 21. Inflation decreased to 7.6% in June from 8.2% last month but is still +15.7% vs 21 and +21.2% vs 19. 39.6% of their 40.9% growth since 19 is real but they remain 2^nd in performance behind Relevant Retail. Recovery started late but inflation started early. Avg 2019>23 Growth: +8.9%, Real: +3.8%. 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 in Jan>Feb, got worse in Mar>Apr, grew in May, then fell in June. Again, only monthly & Ytd real sales vs 21 are negative. Prices are -0.7% vs 22 and are down -1.4% Ytd. 10% of 19>23 growth is real. Avg 2019>23 Growth: +6.9%, Real: +0.7%.

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 slightly deflated in Dec & Feb then strongly dropped in Mar>Jun, -14.0% Ytd vs 22. However, prices are still +17.5% vs 21. The deflation is directly tied to the monthly & Ytd sales drops vs 22. Look at the rates. Real sales vs 22 are up slightly but still down vs 21 & 19.  Avg 2019>23 Growth: +6.5%, 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, 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 then grew in March, starting another roller coaster. Sales fell in June, but all actual sales are up vs 22, 21 & 19. Real sales are down vs June 21 & Ytd vs 22 & 21. Monthly Real sales vs last year have been positive for 2 straight months after 7 negatives in a row. 49% of their 19>23 $ are real – #1 in performance. Avg 2019>23 Growth is: +8.4%, Real: +4.3%. This big group is where America shops. The fact that real sales have been positive for 2 consecutive months gives us hope.

Inflation is slowing but the cumulative impact is still there. Sales increases are also slowing, but the fact that 55% of all real sales numbers vs 22 & 21 are positive again is a good sign. Restaurants are still doing well, and Auto is improving. Gas Stations are now seeing the negative impact of strong deflation with a continued drop in actual sales. However, as always, our biggest concern is Relevant Retail. Their situation has definitely improved. Ytd real sales vs 22 & 21 are still negative, which clearly shows the impact of cumulative inflation. However, monthly real sales vs 22 have been positive for 2 straight months. This is not the end of the crisis, but a slow turnaround appears to be continuing.

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

• Relevant Retail: Avg Growth Rate: +8.4%, Real: +4.3%. Only 2 channels were up from May but 7 were up vs 22 & 21. Only 4 had a “real” increase vs 22 and 5 vs 21. The negative impact of inflation appears to be slowing sales increases.
• All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are down from May and for all comparisons but Ytd vs 21 & 19. Their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +0.3%, Real: -2.4%.
• Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are down vs May but up in all other measurements. Their real sales are down in all measurements but vs June 21 & Ytd vs 19. Only 34% of their 27.5% 19>23 lift is real – the impact of inflation. Avg Growth: +6.3%, Real: +2.3%.
• Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are down from May 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 7.6% of the growth since 2019 is real. Avg Growth: +6.3%, Real: +0.5%.
• Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from May but up in all other measurements, both actual and real vs 22, 21 & 19. Their inflation rate has been relatively low so 74% of their 23.4% growth from 2019 is real. Avg 2019>23 Growth: +5.4%, Real: +4.0%.
• Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. $ales are down from May but up vs 22, 21 & 19. However, Real sales are down for all but Ytd vs 21 & 19. Another positive is: 64% of their 2019>23 growth is real. Avg 2019>23 Growth: +3.8%, Real:+2.5%
• 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. Actual sales are down from May and in all other measurements but Ytd vs 2019. Their real sales are again all down, even vs 2019. Avg 2019>23 Growth: +4.0%, Real: -0.2%.
• 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 from May but down in all measurements but vs Jun 22 & Ytd vs 19. However, consistent deflation has caused real sales to be up in all measurements. Avg 2019>23 Growth: +0.6%, Real: +2.5%.
• 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. Inflation is still high at 8.8%. Sales are down -8.1% from May which caused them to be all negative vs 2022. They still 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: +8.1%, Real: +2.0%.
• 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. Actual $ales are up from May but only positive Ytd vs 22 & 19. Real sales have the same pattern. Prices actually deflated to -0.1% vs June 22 and their inflation rate has been much lower than most groups so 64.7% of their 30.6% growth since 2019 is real. Avg 2019>23 Growth: +6.9%, Real: +4.6%.
• 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 -1.8% vs May but positive in all other measurements. They still have the biggest increase vs 2021 and vs 2019 they are 2^nd only to NonStore. 67% of their 44.8% 19>23 growth and even 53% of their 21>23 growth is real. Their Avg 19>23 Growth is: 9.7%, Real: 6.8%.
• 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 1^st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are down from May but all other measurements are positive. 78% of their 88.7% growth since 2019 is real. Their Avg Growth: +17.2%, Real: +14.0%.

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, there was a new challenge, the worst inflation in 40 years. Overall, and in most product categories it has slowed in Jul>Jun which should help the Retail Situation. Sales were down from May for all big groups and 9 smaller channels. Inflation continues to slow in most channels and even deflate in a few. However, 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 even below the lower inflation rate. Real monthly sales for Relevant Retail have been positive vs 22 for 2 straight months but are still negative for 7 of 11 channels. The turnaround for Relevant retail is not widespread. It is primarily being driven by NonStore with a little help from Health Care, Electronics/Appliances  and Miscellaneous (includes Pet Stores). We still have a long way to go for a full recovery from the inflation tsunami.

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.

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 1^st 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 2^nd 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 1^st 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 2^nd 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 1^st 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.