Information by distribution channel

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.

Retail Channel Monthly $ Update – June Final & July 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 June and then move to the Advance Report for July. 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 June Final. Driven by Relevant Retail & Restaurants, Sales turned down in June. The $ were up for June and YTD vs 2021. However, factoring inflation into the data, for the 3rd straight month only Restaurants had increases in these measurements. Here is the June data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The June Final is $0.6B more than the Advance Report. Only Gas Stations were down. Relevant Retail: +1.5B; Auto: +$0.3B; Restaurants: N/C; Gas Stations: -$1.0B. Total Sales are down slightly from May, but consumers continue to spend more vs 2021. However, the “real” numbers give you a different view. All but Restaurants are again really down in all measurements vs 2021. Restaurants are strong due to a late recovery but also note that 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. Relevant Retail does have the best performance since 2019 as 65.4% of their 31.8% growth is “Real”.

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

Overall – 9 of 11 were down vs May. Vs June 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 the Office/Gift/Souvenir channel was “really” down.

  • Building Material Stores – Their Spring lift is ending and was not as strong as last year. Home Ctr/Hdwe is up 7.1% vs 21 but Farm stores are only +1.2% YTD. The Bldg/Matl group has an inflation rate of 10.5+% which produced all negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 37% since 2019 in both channels. Importantly, 61.4% 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: 11.3%, Real: 7.2%; Farm: 11.4, Real: 7.4%
  • Food & Drug – Both channels are truly essential. Except for the food binge buying in the pandemic, 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 Store $ up from May but real sales are down vs June 2021. However, 89% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month and YTD. Also, only 22.2% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.4%, Real: +1.5%; Drug Stores: +4.3%, 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 kicking in again after stabilizing in April/May at a level below 2021. Their current inflation rate is 5.3% which is down from 7.5% in April but YTD it is still 6.9%. It was also high in 20>21, +4.8%. However, 72% of their 49% lift since 2019 is real. Their Avg Growth Rate was: +14.2%; Real: +10.6%.
  • Gen Mdse Stores – Sales were down for all vs May. 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 only 0.4% of their 7.8% growth since 2019 is real. For the other channels, it averages 41%. Average Growth Rate: SupCtr/Club: 5.2%, Real: 1.9%; $/Value Strs: +7.5%, Real: +4.3%; Disc. Dept.: +2.5%, Real: 0.01%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are down from May but up vs 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 -2.6%. Their true recovery is still a ways off. Avg Growth Rate: +1.7%, Real: -0.9%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. Sales are down vs May but up vs 2021. Also, their YTD growth rate is only half of their average since 2019, but 90% of their 80.3% growth since 2019 is real. Their Avg Growth Rates is: +21.7%, Real: +19.9%. 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. As expected, their sales dipped in January from December, but all measurements have been positive every month since then. Plus, 87% of their 60.1% growth since 2019 is real. Their Avg Growth Rate is: +17.0%, Real: +15.1%. 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 $, 9 channels reported increases in YTD sales over 2021 and 10 are up for the month. 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 slowed a little. Let’s look at the impact on the Advance Retail Sales numbers for July.

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 July. There was a small overall sales decrease from June but $ were up vs July 2021 for all but Auto. However, the actual amount of product sold vs 2021 fell in all but Restaurants.

Overall – Inflation Reality is 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 but Auto $ are down again. July set a new $ record for the month, but the real monthly and YTD sales vs 2021 for all but restaurants are down for the 4th straight month.

Total Retail – Every month in 2022 has set a monthly sales record. July $ are $691B, the 4th largest of all time. In a normal year, sales should stay at or near this level until dipping slightly in September. However, 2022 is not normal. Sales are -0.6% vs June but are still up 8.6% vs July 2021 and 10.2% vs YTD 2021. However, when you factor in 12+% inflation, both measurements are down for the 5th consecutive month and only 41.1% of the 31.9% growth since 2019 is real. The Avg Growth Rate is: +9.7%, Real: +4.2%. The impact of Inflation continues to grow.

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 but set a new record in July. They are the only big group that is positive in all measurements. Inflation is high at 7.5% for June and 7.0% YTD but it is the lowest of any big group. 60.8% of their 31.6% growth since 2019 is real. The May>July % is up 50% from Jan>April, showing the growing appeal of “eating out” after months of cooking at home. Their Avg Growth Rate: +9.6%, Real: +6.0%. 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. Except for a tiny lift in June their monthly sales have been below 2021 since March. These are the only reported sales negatives by any group vs 2021. This is bad but their real sales numbers are much worse. Extremely high inflation has pushed their real sales down -9+% in all measurements vs 2021, the worst numbers of any group. Plus, their 25.3% growth since 2019 is really down -3.4%. Their Avg Growth Rate: +7.8%, Real: -1.2%. It is likely that the drops in the reported $ales vs 2021 are 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 July. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation slowed a bit in July but at 44.5%, it is still by far the highest of any expenditure category. It is 46.7% YTD vs 2021 and has even caused consumers to buy 5.9% less than they did in 2019. Avg Growth Rate: +14.7%, Real: -2.0%. It’s a textbook example of the initial impact of inflation. Consumers are spending more but buying 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, went on an up/down roller coaster from Mar>June but fell again in July. All months in 2022 set new records but their YTD increase is now 25% below their 9.6% avg growth since 2019. Now, we’ll look at the impact of inflation. 63.9% of their 31.6% growth since 2019 is real. However real sales vs 2021 are down -2.0% for the month and -0.8% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.6%, Real: +6.3%. 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 becoming even more apparent. All groups but Restaurants have had no monthly or YTD real growth vs 2021 for 4 consecutive months. Both Auto & Gas Stations are even “really down” vs YTD 2019. Added together, this has produced 5 straight months of real monthly and YTD drops for Total Retail. We are in Phase II of inflation. Consumer spending grows but the amount bought declines. With 4 of the last 5 months down vs 2021, the Auto Group is likely in Phase III, when consumers actually cut back on spending. If inflation continues, this worsening situation will become more widespread.

  • Relevant Retail: Avg Growth Rate: +9.6%, Real: +6.3%. 5 channels were up vs June but 8 vs July 2021, producing a July $ales record. 10 were up YTD vs 2021 but you will see the negative impact of inflation in the real numbers.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow in 2022. Their YTD numbers have been positive vs 2019 since April but in July they are still down in “real” terms in all measurements vs both 2019 & 2021. Avg Growth: +0.07%, Real: -2.6%.
  • Club/SuprCtr/$ – 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. July sales are down from June but up vs July 2021 and YTD. Their real numbers are down and only 36.2% of their 17.4% lift from 2019 is real. Avg Growth: +5.5%, Real: +2.1%.
  • 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 June. Monthly & YTD increases vs 2021 are strong but inflation is stronger. Real sales are down and only 19.4% of the growth since 2019 is real. Avg Growth: +6.4%, Real = +1.3%.
  • 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 July and are ahead of 2021. However, real sales vs July 2021 are down. Their inflation rate is low so 89% of their 14.4% growth from 2019 is real. Their Avg Growth is: +4.6%, Real: +4.1%.
  • 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. July sales are only +0.2% from 2021 and real sales are -4.9%. YTD $ are up 8.7%% and 88% of their growth from 2019 is real. Avg Growth: 5.1%, Real: 4.5%.
  • 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 June, but down vs July 21 and all their real numbers vs 2021 are negative. Only 24.9% of their growth since 2019 is real. Avg Growth: +6.7%, Real: +1.7%.
  • 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 minimally from June but are down across the board vs 2021. The increase from June and deflation kept sales positive vs 2019 but only +0.01%. Avg Growth: +0.005%, Real: +0.22%.
  • 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 -3.8% in June and -9.3% in July. July & YTD sales are up vs 2021, but when you factor in strong, double-digit inflation, the amount sold vs 2021 is significantly lower for both. However, 59.6% of their strong 36.4% sales growth since 2019 is real. Their Avg Growth is: +10.9%, 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. July sales fell -0.7% from June but were still up vs July 2021 & YTD. However, all real measurements are down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 79% of their 38.2% 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 -2.1% from June but from April>July they have held the top spot in YTD increase vs 2021. Their YTD growth since 2019 is 2nd only to NonStore. Plus, 82.9% of the 46.2% growth since 2019 is real. Their Avg Growth is: +13.5%, Real: +11.4%.
  • 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 Growth has slowed significantly in 2022 but all measurements are positive. 88.7% of their 73.6% increase since 2019 is real. Their Avg Growth is: +20.2%, Real: +18.2%.

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 July 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 has slowed markedly. Overall, the market is generally in phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph above illustrate this perfectly and show how widespread that it has become. 8 of 11 channels are up vs July 2021 and 10 are up YTD. However, when you factor in inflation, only 2 are up for July and 4 for YTD. Inflation is real and there are real and even worse consequences if it continues. To see an example of this, take a look at what is happening in the Auto Group.

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.

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 mix of actual products is substantially different.

Retail Channel Monthly $ Update – May Final & June 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 May and then move to the Advance Report for June. 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 May Final. After a slight downturn in April sales generally grew slightly in May. The $ were up for May and YTD vs 2021 for all but Auto. However, when you factor in inflation, for the 2nd straight month only Restaurants had increases in these measurements. Here is the May data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The May Final is $0.5B more than the Advance Report. All but Relevant Retail were up. Relevant Retail: -1.5B; Auto: +$0.6B; Restaurants: +$0.1B; Gas Stations: +$1.4B. Total Sales are up slightly from April, as consumers continue to spend more vs 2021 in all but Auto. However, the “real” numbers give you a different view. All but Restaurants are again really down in all measurements. Restaurants are strong due to a late recovery but also note that 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. Relevant Retail does have the best performance since 2019 as 65.7% of their 30.9% growth is “Real”.

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

Overall – 10 of 11 were up vs April. Vs May 2021, 9 reported more $ but only 4 were really up. In YTD vs 2021, 9 reported increases but again only 4 were real. Vs 2019, only the Office/Gift/Souvenir channel was “really” down.

  • Building Material Stores – Their Spring lift has started but it is not as strong as last year. Home Ctr/Hdwe is up vs 21 but Farm stores are down YTD. The Bldg/Matl group has an inflation rate of 11% which produced all negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 30% since 2019 in both channels. Importantly, 61.4% 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: 11.0%, Real: 7.0%; Farm: 10.7, Real: 6.7%
  • Food & Drug – Both channels are truly essential. Except for the food binge buying in the pandemic, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The rate for Grocery products is 5 times higher than for Drugs/Med products. Sales for Drug Stores are positive in all measurements and 89% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month and YTD. Also, only 24.1% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.2%, Real: +1.6%; Drug Stores: +3.9%, Real: +3.5%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Their normal Spring lift started in March then stabilized in April/May at a level below 2021. Their current inflation rate is 5.7% which is down from 7.5% in April but YTD it is 7.3%. It was also high in 20>21, +4.8%. However, 71% of their 48.1% lift since 2019 is real. Their Avg Growth Rate was: +14.0%; Real: +10.4%.
  • Gen Mdse Stores – Sales in all channels were up vs April. Discount Dept stores are down for the month vs 2021. All other groups are up slightly for May and YTD vs 2021. All real measurements vs 2021 are negative for all channels. Disc. Dept Stores were struggling before COVID and only 1% of their 7.7% growth since 2019 is real. For the other channels, it averages 46%. Avg Growth Rate: SupCtr/Club: 4.4%, Real: 2.1%; $/Value Strs: +7.1%, Real: +4.0%; Disc. Dept.: +2.5%, Real: 0.04%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up vs April and vs 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 -3.7%. Their true recovery is still a ways off. Avg Growth Rate: +1.3%, Real: -1.2%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. Sales are down vs April but up vs 2021. Also, their YTD growth rate is less than half of the average since 2019, but 90% of their 78.1% growth since 2019 is real. Their Avg Growth Rates is: +21.2%, 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. As expected, their sales dipped in January from December, but all measurements have been positive every month since then. Plus, 87% of their 58.8% growth since 2019 is real. Their Avg Growth Rate is: +16.7%, Real: +14.8%. 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 YTD sales over 2021 and 9 are up for the month. When you factor in inflation, the number with any “real” growth falls to 4 for YTD & monthly. This is a very clear indication of the growing impact of inflation at the retail channel level. Recent data showed that Inflation continues to grow. Let’s look at the impact on the Advance Retail Sales numbers for June.

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 very evident in June. There was a small overall sales decrease from May but $ were up vs June 2021 for all but Auto. However, the actual amount of product sold vs 2021 fell in all but Restaurants.

Overall – Inflation Reality is setting in. The monthly increase vs the previous year continues to be lower than the inflation rate. The still recovering Restaurants and Gas Stations are up double digits vs 2021 but Auto $ are down again. June set a new $ record for the month, but the real monthly and YTD sales vs 2021 for all but restaurants are down.

Total Retail – Every month in 2022 has set a monthly sales record. June $ are $695B, the 3rd largest of all time. In a normal year, sales should stay at or near this level until dipping slightly in September. However, 2022 is not normal. Sales are -0.4% vs May but are still up 8.9% vs June 2021 and 10.3% vs YTD 2021. However, when you factor in 13+% inflation, both measurements are down for the 4th consecutive month and only 42.3% of the 31.9% growth since 2019 is real. The Avg Growth Rate is: +9.7%, Real: +4.3%. The impact of Inflation continues to grow.

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 have turned up since then setting new all-time monthly records in March>May. $ fell -2.5% in June but they are the only big group that is positive in all other measurements. Inflation is high at 7.5% for June and 6.9% YTD but it is the lowest of any big group. 60.9% of their 30.7% growth since 2019 is real. The May/June % is up 50% from April, showing the appeal of “eating out” after months of cooking at home. Their Avg Growth Rate: +9.3%, Real: +5.9%. They only account for 12.7% of Total Retail sales, but their positive performance significantly 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 fell in January, turned up in Feb/Mar, fell April>May and were +0.4% in June. They are unique in that their Mar>June monthly sales are below 2021. These are the only reported sales negatives by any group vs 2021. This is bad but their real sales numbers are much worse. Extremely high inflation has pushed their real sales down -9+% in all measurements vs 2021, the worst overall numbers of any group. Plus, their 26.7% growth since 2019 is really down -2.3%. Their Avg Growth Rate: +8.2%, Real: -0.8%. It is likely that the drops in the reported $ales in March>June vs 2021 are 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 January and February then turned up in March>June. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation is in all of the headlines and is by far the highest of any expenditure category. It is over 47% YTD for 2022 vs 2021 and has even caused consumers to buy 5.7% less than they did in 2019. Avg Growth Rate: +14.5%, Real: -1.9%. It’s a textbook example of the initial impact of inflation. Consumers are spending more but buying 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 January and February, then went on an up/down roller coaster from Mar>June. All months in 2022 set new records but their YTD increase is now 22.7% below their 10.1% avg growth since 2019. Now, we’ll look at the impact of inflation. 64.2% of their 31.3% growth since 2019 is real. However real sales vs 2021 are down -3.8% for the month and -1.0% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +10.1%, Real: +6.4%. The performance of this huge group is critically important. This is where America shops. Real YTD sales are down 1.0% 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 becoming even more apparent. All groups but Restaurants now have no monthly or YTD real growth vs 2021. Both Auto & Gas Stations are even “really down” vs YTD 2019. Added together, this has produced 4 straight months of real monthly and YTD drops for Total Retail. We are in Phase II of inflation. Consumer spending grows but the amount bought declines. With 4 straight down months vs 2021, the Auto Group is likely in Phase III, when consumers actually cut back on spending. If inflation continues, this worsening situation will become more widespread.

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

  • Relevant Retail: Avg Growth Rate: +9.5%, Real: +6.4%. 4 channels were up vs May but 8 vs June 2021, producing a June $ales record. 10 were up YTD vs 2021 but you will see the negative impact of inflation in the real numbers.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow in 2022. Their YTD numbers have been positive vs 2019 since April but in June they are still down in real terms in all measurements vs both 2019 & 2021. Avg Growth: +0.1%, Real: -2.5%.
  • Club/SuprCtr/$ – 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. June sales are down from May but up vs June 2021 and YTD. Their real numbers are down and only 38.9% of their 17.5% lift from 2019 is real. Avg Growth: +5.5%, Real: +2.2%.
  • 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 May. Monthly & YTD increases vs 2021 are strong but inflation is stronger. Real sales are down and only 21.8% of the growth since 2019 is real. Avg Growth: +6.3%, Real = +1.4%.
  • Health/Drug Stores – At least the drug stores in this group are essential, but consumers visit far less frequently than Grocery stores. Most of their COVID ride has been rather calm. However, sales turned down in June vs May and 2021. Their inflation rate is low so 89% of their 13.7% growth from 2019 is real. Their Avg Growth is: +4.4%, Real: +3.9%.
  • 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 has continued until June 2022. $ are down 8.1% from May and only +0.2% from 2021. YTD $ are still up 10.1% and 88% 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. They are up from May, but growth is slowing and all their real numbers vs 2021 are negative. Only 30.4% of their growth since 2019 is real. Avg Growth: +6.9%, Real: +2.0%.
  • Electronic & Appliances – Look at the graph. 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 May but are down across the board vs 2021. The increase from May and deflation kept sales positive vs 2019 but only +1.1%. Avg Growth: +0.35%, Real: +0.44%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift is somewhat inconsistent as $ fell 4.2% from May. June & YTD sales are up vs 2021, but when you factor in strong, double-digit inflation, the amount sold vs 2021 is significantly lower for both. However, 61.3% of their strong 37.5% sales growth since 2019 is real. Their Avg Growth is: +11.2%, Real: +7.1%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. Sales were up 5.7% from May which kept the month & YTD $ up vs 2021. However, all real measurements are down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 79% of their 37.7% growth since 2019 is real. Avg Growth is: +11.3%, Real: +9.1%.
  • 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. $ are -4.4% from May but from April>June they have held the top spot in both monthly & YTD lifts vs 2021. Their YTD growth since 2019 is 2nd only to NonStore. Plus, 82.8% of the 44.8% growth since 2019 is real. Their Avg Growth is: +13.1%, Real: +11.1%.
  • 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. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their Growth has slowed significantly in 2022 but all measurements are positive. 88.7% of their 72.6% increase since 2019 is real. Their Avg Growth is: +20.0%, 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. 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. Moreover, each month it is getting 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 has slowed markedly. Overall, the market is generally in phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph above illustrate this perfectly and show how widespread that it has become. 8 of 11 channels are up vs June 2021 and 10 are up YTD. However, when you factor in inflation, only 2 are up for June and 4 for YTD. Inflation is real and there are real and even worse consequences if it continues. To see an example of this, take a look at what is happening in the Auto Group.

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.

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 mix of actual products is substantially different.

Retail Channel Monthly $ Update – April Final & May 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 April and then move to the Advance Report for May. 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 April Final. After an uptick in March, sales generally turned down slightly in April. The $ were up for April and YTD vs 2021 for all groups but Auto. However, when you factor in inflation, only Restaurants had increases in these measurements. Here is the April data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The April Final is $2.6B less than the Advance Report. The drop was driven by Relevant Retail: -3.6B; Auto: -$0.1B; Restaurants: +$0.7B; Gas Stations: +$0.4B. Total Sales are down slightly from March, but consumers continue to spend more vs 2021 in all but Auto. However, the “real” numbers give you a different view. All but Restaurants are really down in all measurements. Restaurants are strong due to a late recovery but also note that 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 now negative. Relevant Retail does have the best performance since 2019 as 67.9% of their 31.8% growth is “Real”.

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

Overall – Only 6 of 11 were up vs March. Vs April 2021, 9 reported more $ but only 2 were really up. In YTD vs 2021, 9 reported increases but only 4 were real. Vs 2019, only the Office/Gift/Souvenir channel was “really” down.

  • Building Material Stores – Their Spring lift has started but it is not as strong as last year. Home Ctr/Hdwe is up vs 21 but Farm stores are down for the month & YTD. The Bldg/Matl group has an inflation rate over 11% which produced all negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 30% since 2019 in both channels. Importantly, 67.9% 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: 11.3%, Real: 7.5%; Farm: 10.5, Real: 6.6%
  • Food & Drug – Both channels are truly essential. Except for the food binge buying in the pandemic, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The rate for Grocery products is 5 times higher than for Drugs/Med products. Sales for Drug Stores are flat vs March 2021 but 90% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month and YTD. Also, only 28.5% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.3%, Real: +1.9%; Drug Stores: +4.1%, Real: +3.7%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Their normal Spring lift started in March then stabilized in April at a level considerably below 2021. Their current inflation rate is 7.5% but it was also high in 20>21, +4.8%. However, 73% of their 48.8% lift since 2019 is real. Their Avg Growth Rate was: +14.2%; Real: +10.7%.
  • Gen Mdse Stores – Sales in SupCtr/Clubs fell vs March and all channels are up only slightly for the month and YTD vs 2021. All real measurements vs 2021 are negative for all channels. Disc. Dept Stores were struggling before COVID and only 17% of their 8% growth since 2019 is real. For the other channels, it averages 45%. Avg Growth Rate: SupCtr/Club: 5.6%, Real: 2.5%; $/Value Strs: +6.6%, Real: +3.5%; Disc. Dept.: +2.9%, Real: +0.5%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are down vs March but up vs 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 -4.3%. Their true recovery is still a long way off. Avg Growth Rate: +1.0%, Real: -1.5%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. April sales are up in all measurements, but the YTD growth rate is less than half of the average since 2019. However, 91% of their 81.8% growth since 2019 is real. Their Avg Growth Rates is: +22.1%, Real: +20.4%. 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. In 2022, they are the Sales increase leaders over 2021. As expected, their sales dipped in January from December but all measurements have been positive every month since then. Plus, 88% of their 62.9% growth since 2019 is real. Their Avg Growth Rate is: +17.7%, Real: +15.8%. They are 2nd in growth since 2019 to the internet, which is somewhat surprising.

There is no doubt that high inflation is an important factor in Retail. In actual $, 9 channels reported increases in YTD sales over 2021 and 9 are up for the month. When you factor in inflation, the number with any “real” growth falls to 4 YTD & 2 monthly. This is a very clear indication of the growing impact of inflation at the retail channel level. Recent data showed that Inflation continues to grow. Let’s look at the impact on the Advance Retail Sales numbers for May.

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 has entered the game with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. In May there was a  small overall increase from April, but the amount sold again fell in all but Restaurants. If it continues, it can reduce consumer spending. This has happened in Auto in April & May.

Overall – Inflation Reality is setting in. The monthly increase vs the previous year continues to be smaller than it has been. The still recovering Restaurants and Gas Stations are up double digits vs 2021 but Auto $ are down again. May set a new $ record for the month, but the real monthly and YTD sales vs 2021 for all but restaurants are down.

Total Retail – Every month in 2022 has set a monthly sales record. May $ are $698B, second only in $ to December 2021. In a normal year, sales should stay at or near this level until dipping slightly in September. However, 2022 is not normal. Sales are +2.4% vs April but are still up 8.2% vs May 2021 and 10.6% vs YTD 2021. However, when you factor in 13+% inflation, both measurements are down for the 3rd consecutive month and only 43.6% of the 31.2% growth since 2019 is real. The Avg Growth Rate is: +9.5%, Real: +4.3%. The impact of Inflation is growing.

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 have turned up since then setting new all-time monthly records in March, April and now May ($90.2B). They are the only big group that is positive in all measurements. Their inflation is high at 7.3% for May and 6.8% YTD but it is the lowest of any big group. 61.6% of their 30.2% growth since 2019 is real. This is up from 51% in April which shows the appeal of “eating out” after months of cooking at home. Their Avg Growth Rate: +9.2%, Real: +5.8%. Although they only account for 12.9% of Total Retail sales, their positive performance significantly 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 fell in January, turned up in Feb/Mar then fell again in April/May. They are unique in that their March, April and May sales are below 2021. These are the only reported sales negatives by any group vs 2021. This is bad but their real sales numbers are much worse. Extraordinarily high inflation has pushed their real sales down -16+% in all measurements vs 2021, the worst performance of any group. Plus, their 26.7% growth since 2019 is really down -1.4%. Their Avg Growth Rate: +8.2%, Real: -0.5%. It is very likely that the drops in the reported $ales in March>May are tied to extreme 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 January and February then turned up in March>May. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation is in all of the headlines and is by far the highest of any expenditure category. It is over 44% for 2022 vs 2021 and has even caused consumers to buy 6% less than they did in 2019. Avg Growth Rate: +13.2%, Real: -2.0%. It’s a textbook example of the initial impact of inflation. Consumers are spending more but buying 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 January and February, turned up in March, flattened in April, then grew in May. All months in 2022 set new records but their YTD increase is now 23.4% below their 9.4% avg growth since 2019. Now, we’ll look at the impact of inflation. 65.8% of their 31% growth since 2019 is real. However real sales vs 2021 are down -1.8% for the month and -0.4% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.4%, Real: +6.4%. The performance of this huge group is critically important. This is where America shops. Real YTD sales are down 0.4% so the amount of products that consumers bought in 2022 is actually less than in 2021. They just paid more. That’s not good.

The impact of inflation is truly beginning to Hit home. All groups but Restaurants now have no monthly or YTD real growth vs 2021. Both Auto & Gas Stations are even “really down” vs YTD 2019. Added together, this has produced 3 straight months of real monthly and YTD drops for Total Retail. We are now in Phase II of inflation. Consumer spending increases but the amount bought declines. With 3 straight down months, the Auto Group is likely in Phase III, when consumers actually cut back on spending. If inflation continues, this worsening situation will become more widespread.

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

  • Relevant Retail: Avg Growth Rate: +9.4%, Real: +6.4%. 9 channels were up vs April and vs May 2021. This was enough to set a May $ales record. 10 were up YTD vs 2021 but you will see the negative impact of inflation in the real numbers.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow in 2022. Their YTD numbers turned positive vs 2019 in April but in May they are still down in real terms in all measurements vs both 2019 & 2021. Avg Growth: +0.04%, Real: -2.6%.
  • Club/SuprCtr/$ – 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. While May sales are up from April and vs May 2021 and YTD, their real numbers are down and only 41.2% of their 17.7% lift from 2019 is real. Avg Growth: +5.6%, Real: +2.4%.
  • Grocery – These essential stores depend on frequent purchases, so except for the binge buying in 2020, their changes are generally less radical. Inflation has hit Groceries hard. Monthly and YTD increases vs 2021 are strong but inflation is stronger. Real sales are down and only 24.5% of the growth since 2019 is real. Avg Growth: +6.3%, Real: +1.6%.
  • Health/Drug Stores – At least the drug stores in this group are essential, but consumers visit far less frequently than Grocery stores. Most of their COVID ride has been rather calm. Their inflation rate is low and sales are positive in all measurements. Plus, 90% of their 13.3% growth from 2019 is real. Their Avg Growth is: +4.2%, Real: +3.8%.
  • 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 has continued through 2022. $ are up 5.9% from April and they’re positive in all measurements. Also, 89% of their growth from 2019 is real. Avg Growth: 5.1%, Real: 4.6%.
  • 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 on Furniture is very high, so growth is slowing and their real numbers vs 2021 are negative. Only 32.4% of their growth since 2019 is real. Avg Growth: +6.9%, Real: +2.4%.
  • Electronic & Appliances – Look at the graph. 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 April but are down across the board vs 2021. The increase from April and deflation has turned sales positive vs 2019 but only +0.9%. Avg Growth: +0.30%, Real: +0.26%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. After slowing in April, this year’s spring lift is restarting but at a lower level than 2021. When you factor in strong, double-digit inflation, the amount sold vs 2021 is significantly lower for both May and YTD. 61.5% of their strong 36.6% sales growth since 2019 is real. Their Avg Growth is: +11.0%, Real: +7.0%.
  • 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. Sales were up in May which made the month and YTD $ up vs 2021. However, all “real” measurements are down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 79% of their 36.8% growth since 2019 is real. Their Avg Growth is: +11.0%, Real: +8.8%.
  • 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. They set a new monthly $ales record in December. In April & now May, they moved to the top spot in both monthly & YTD lifts vs 2021. Their YTD growth since 2019 is 2nd only to NonStore. Plus, 83% of the 44.8% growth since 2019 is real. Their Avg Growth is: +13.1%, Real: +11.1%.
  • 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. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their Growth has slowed significantly in 2022 but all measurements are positive. 89% of their 71.6% increase since 2019 is real. Their Avg Growth is: +19.7%, Real: +17.8%.

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. 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. Moreover, each month it is getting 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 has slowed markedly. Overall, the market is generally in phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph above illustrate this perfectly and show how widespread that it has become. 8 of 11 channels are up vs May 2021 and 9 are up YTD. However, when you factor in inflation, only 4 are up for May and 4 for YTD. Inflation is real and there are real and even worse consequences if it continues. To see an example of this, take a look at what is happening in the Auto Group.

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.

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 mix of actual products is substantially different.

Retail Channel Monthly $ Update – March Final & April Advance

The pandemic started in March 2020. In the Retail sector, we have seen both record drops and record highs. The market has generally recovered but now we are being hit by extreme inflation. 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 March and then move to the Advance Report for April. 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 March Final. February is the normal Retail $ bottom for the year and sales turned up in March. Overall, the growth is slowing, and Auto sales actually dropped vs March 2021. Obviously, factoring in inflation paints a different picture of the situation. Here are the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The March Final is $4.2B more than the Advance Report. All but Auto were up. Restaurants: +$6.3B; Auto: -$5.5B; Gas Stations: +$0.4B; Relevant Retail: +$3.0B. All groups are up from the February bottom. Growth is slowing but all but Auto are up vs 2021 & 2019. When you look at the “real” numbers you get a different view. The Auto/Gas groups are really down in all measurements. Restaurants are strong due to a late recovery but also note that half of the inflation in this group came before 2022. Total and Relevant Retail are starting to see the impact of inflation as Real sales are down or flat vs 2021. Relevant Retail has the best performance since 2019 as 69% of their 31% growth is “Real”.

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

Overall – All 11 were up vs February. Vs March 2021, 6 reported more $ but only A/O Misc. was really up. In YTD, 7 reported increases but only 4 were real. Vs 2019, Only Office/Gift was “really” down, the only decrease vs 2019.

  • Building Material Stores – Their Spring lift has started but it is not as strong as last year. Home Ctr/Hdwe is up vs 21 but Farm stores are down for the month & YTD. The Bldg/Matl group has an inflation rate over 10% which produced all negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 30% since 2019 in both channels. Importantly, 2/3rds of this lift was real. The chart shows that almost all of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 11.8%, Real: 8.0%; Farm: 10.3, Real: 6.6%
  • Food & Drug – Both channels are truly essential. Except for the food binge buying in the pandemic, 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. Sales for Drug Stores are down vs March 2021 but 84% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month and YTD. Also, only 31% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.1%, Real: +2.0%; Drug Stores: +4.2%, Real: +3.7%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Their Spring lift has started but it’s not as strong as last year. Their current inflation rate is almost 8% but it was also high in 20>21, +4.8%. However, 73% of their 48.9% lift since 2019 is real. Their Avg Growth Rate was: +14.2%; Real: +10.7%.
  • Gen Mdse Stores – All channels had strong growth out of the February “bottom” but vs 2021 they don’t look good. Clubs/SupCtrs & $/Value stores are up slightly YTD vs 2021 but all other measurements vs 2021 – published or real, are negative. Disc. Dept Stores were struggling before COVID and only 9% of their 8% growth since 2019 is real. For the other channels, it averages 47%. Avg Growth Rate: SupCtr/Club: 5.7%, Real: 2.8%; $/Value Strs: +6.1%, Real: +3.2%; Disc. Dept.: +2.6%, Real: 0.2%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up vs 2021, but real sales are flat or down, including a real 6.6% drop from 2019. Their true recovery is still a long way off. Avg Growth Rate: +0.2%, Real: -2.3%
  • Internet/Mail Order – The sales growth of the “hero” of the Pandemic is slowing. Real March sales vs 2021 are even down. However, 91% of their 81.9% growth since 2019 is real. Their Avg Growth Rates is: +22.1%, Real: +20.4%. 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. Sales continue exceptionally strong in 2022. In fact, they are the only channel on the chart with all positive measurements. Plus, 88% of their 61.6% growth since 2019 is real. Their Avg Growth Rate is: +17.3%, Real: +15.6%. They are 2nd in growth since 2019 to the internet, which is somewhat surprising.

There is no doubt that high inflation is an important factor in Retail. In actual $, 8 channels are up in YTD sales over 2021 but only 5 are up for the month. When you factor in inflation, the number with any “real” growth falls to 4 YTD & 1 monthly. Inflation is starting to have a growing impact at the channel level. Now, the Advance numbers for April.

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 but in fact, all big groups set annual sales records in 2021. Now radical inflation has entered the game with the largest increase in 40 years. This can first reduce the amount of product sold but not $ spent. In April there was a  small overall increase from March, but the amount sold fell in all but Restaurants. If it continues, it can actually reduce consumer spending which is now happening in Auto.

Overall – Inflation Reality is starting to set in. The monthly increase vs the previous year is much smaller than it has been. The still recovering Restaurants and Gas Stations are up double digits but Auto $ are actually down. Although April set a new $ record for the month, the real monthly and YTD sales vs 2021 for all but restaurants are down or flat.

Total Retail – Every month in 2022 has set a monthly sales record. April $ are $684B. In a normal year, sales should stay at or near that level until dipping slightly in September. However, 2022 is not normal. Sales are flat vs March but are still up 8.7% vs April 2021 and 11.3% vs YTD 2021. When you factor in 13% inflation, both measurements are down for the 2nd consecutive month and only 46.4% of the 32.1% growth since 2019 is real. The Avg Growth Rate is: +9.7%, Real: +4.7%. Inflation is making 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 have turned up since then setting new all-time monthly records in March and now April ($86.4B). They are the only big group that is positive in all measurements. Their inflation is high at 7.1% for April and 6.7% YTD but it is the lowest of any big group. Also, only 51.4% of their 29.0% growth since 2019 is real. This is due to the fact that inflation started earlier in this group, +5.9% in 2021. Here is their Avg Growth Rate: +8.9%, Real: +4.7%. Although they only account for 12.6% of Total Retail sales, their positive performance significantly 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 fell in January, turned up in Feb/Mar then fell again in April. They are unique in that their March and now April sales are below 2021. These are the only reported sales negatives by any group vs 2021. This is bad but their real sales numbers are much worse. Extraordinarily high inflation has pushed their real sales down -15+% in all measurements vs 2021, the worst performance of any group. Plus, only 16% of their 29.4% growth since 2019 is real. Their Avg Growth Rate: +9.0%, Real: +1.5%. It is very likely that the drops in the reported $ales in March & April are tied to extreme 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 January and February then turned up in March & April. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation is in all of the headlines and is by far the highest of any expenditure category. It is over 42% for 2022 vs 2021 and has even caused consumers to buy less than they did in 2019. Avg Growth Rate: +12.7%, Real: -2.4%. It’s a textbook example of the initial impact of inflation. Consumers are spending more but buying 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 January and February, turned up in March, but were basically flat in April. All months in 2022 set new records but their YTD numbers are now below their 9.7% avg growth. Now, we’ll look at the impact of inflation. 68.2% of their 32.1% growth since 2019 is real. However real sales vs 2021 are down -1.6% for the month and flat YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.7%, Real: +6.8%. The performance of this huge group is critically important. This is where Retail America shops. Real YTD sales are up only 0.2% but the amount of products that consumers bought in March & April was actually less than 2021. They just paid more. That’s not good.

The impact of inflation is truly beginning to Hit home. Auto and Gas Stations have no monthly or YTD real growth. Relevant Retail is really down for the 2nd straight month and basically flat YTD. Restaurants have the only positive real numbers. This adds up to real monthly and YTD drops for Total Retail. We are now in Phase II of inflation. Consumer spending increases but the amount bought declines. With 2 straight down months, the Auto Group may be moving into Phase III, when consumers actually cut back on spending. If inflation continues, the situation will only get worse.

  • Relevant Retail: Avg Growth Rate: +9.7%, Real: +6.8%. Only 5 channels were up vs March but 8 were up vs April 2021. This was enough to set an April $ales record but you see the negative impact of inflation in the “real” numbers.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow through April 2022. Their YTD numbers turned positive vs 2019 in April but are still down in real terms vs both 2019 & 2021. Avg Growth: +0.3%, Real: -2.3%.
  • Club/SuprCtr/$ – 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. While April Sales are up vs 2021 and YTD, their real numbers are down and only 46.5% of their 18.7% lift from 2019 is real. Avg Growth: +5.9%, Real: +2.8%.
  • Grocery – These stores are essential and depend on frequent purchases, so except for the binge buying in 2020, their changes are generally less pronounced. Inflation has hit Groceries hard. Monthly and YTD increases vs 2021 are strong but real sales are actually down and only 28.5% of the growth since 2019 is real. Avg Growth: +6.3%, Real = +1.9%.
  • Health/Drug Stores – At least the drug stores in this group are essential, but consumers visit far less frequently than Grocery stores. Most of their COVID ride has been rather calm. Their inflation rate is low but enough to push April sales down vs 2021. However, 89% of their small 13.5% growth from 2019 is real. Their Avg Growth is: +4.3%, Real: +3.8%.
  • 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 has continued through 2022. $ are up only slightly from March but they’re positive in all measurements and 92% of growth from 2019 is real. Avg Growth: 4.8%, Real: 4.5%.
  • 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 on Furniture is extremely high so all of the real numbers for 2022 are negative and only 36% of their growth since 2019 is real. Avg Growth: +7.2%, Real: +2.7%.
  • Electronic & Appliances – Look at the graph. This channel has problems beyond the pandemic. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Their sales are down across the board vs 2021. April deflation did help turn their sales positive vs 2019 but only 11% is real. Avg Growth: +0.3%, Real: +0.03%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift looks to be lower than 2021 and when you factor in strong, double-digit inflation, the amount sold is significantly lower for both April and YTD. 63.6% of their 37.1% sales growth since 2019 is real. Their Avg Growth is: +11.1%, Real: +7.3%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. Book and Hobby Stores recovery was slower. YTD sales are up 0.4% but all other measurements are down vs 2021 and last month. Inflation in this group is lower than most groups and most of it comes from Sporting Goods. 78% of their 36.2% growth since 2019 is real. Their Avg Growth is: +10.9%, Real: +8.7%.
  • 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 and now in April. They are #1 in April & YTD lifts vs 2021 and their YTD growth since 2019 is 2nd only to NonStore. Plus, 84% of the 46.1% growth since 2019 is real. Their Avg Growth is: +13.5%, Real: +11.5%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated the online spending movement. 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 Growth has slowed in 2022 but all measurements are positive. 90% of their 76% increase since 2019 is real. Their Avg Growth is: +20.7%, Real: +18.9%.

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. Moreover, each month it is getting 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 has slowed markedly in April. In our summary of the big groups, we said that the market had entered phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph above illustrate this perfectly and show how widespread that it has become. 8 of 11 channels are up vs April 2021 and 10 are up YTD. However, when you factor in inflation, only 4 are up for April and 4 for YTD. Inflation is real and there are real and even worse consequences if it continues.

Finally, here are the details of the specific 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.

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

2022 Retail Sales Revisited – The Impact of Runaway Inflation

Inflation continues to make headlines as the prices for many products have risen over 2021 at the highest rate in 40 years. In recent years, the year over year inflation rate has hovered at about 2%. That’s why the March inflation number of 8.5% over 2021 has gotten so much attention.

It got my attention too. I decided to look a little closer at the expenditure categories and the methodology used by the US Bureau of Labor Statistics to compute the CPI (Inflation). I am also enamored by the Monthly Retail Sales report produced by the Census Bureau. This is the most accurate and timely measurement of the sales in the U.S. Retail market. However, we must note that the data only comes from outlets classified as retailers or restaurants & bars. Outlets whose primary business is Services, from Movie Theaters to Hair Salons, are not included. They have their own report. The outlets in the Monthly Retail report are “all about” products. A few of these channels may provide a small number of services but in the overall scheme of things the $ are inconsequential. Pet Stores are one of the retail outlets included in the report and they offer Pet Services. However, according to the most recent Economic Census, Pet Services only account for 6% of Total Pet Stores’ sales. The vast majority of true Retail outlets offer no services.

So how is the CPI market basket divided between Commodities (Products) and Services? The relative importance of expenditures is validated from data gathered in the annual Consumer Expenditure Survey, which is managed by the US BLS but executed by Census Bureau personnel. The base relative importance is updated every 2 years in December of odd numbered years. It is revised monthly, but the base is the key starting point.

In December 2021 The Relative Importance was

      Total CPI: 100;  Services: 60.9;  Commodities: 39.1

I was taken by surprise by these numbers. I had no idea that Services were 50% more important than Commodities in measuring inflation. Let’s look at the March 2022 year over year inflation numbers again:

     Total CPI: +8.54%;  Services: +5.12%;  Commodities: +14.17%

Obviously, for those involved in the retail trade, inflation is significantly worse than even what is being trumpeted in the headlines. Much has been said about overall inflation being the worst in 40 years. I downloaded the CPI data for Commodities. They have monthly numbers going back to 1956. The 14.17% YOY inflation rate in March was the highest for any month in the entire 66-year database. Another thing is very clear. Just using the overall CPI rate for retail is not accurate. I researched commodities and it turns out that the All Commodities aggregate accurately reflects Total Retail. At the end of the report, I have a condensed listing of CPI expenditure categories so that you can check my reasoning.

But now let’s take a look at 2022 Total Retail Sales, including the 4 Major Groups – Restaurants, Auto, Gas Stations and Relevant Retail. We show the sales change from 2021 for each month and YTD.

As we hear in all the news flashes. Despite inflation, sales are up. The gains by Gas Stations and Restaurants are spectacular but remember they were the hardest hit by the pandemic and recovery came late. You can also see that the overall increase slowed significantly in March. Gas Stations maintained their rate of increase but Auto actually had a slight decrease in Sales. The YTD numbers look good for all.

Now let’s see what inflation looks like so far this year.

Before we get into the numbers, let’s talk about the expenditure categories that I used. We talked about All Commodities being a match for Total Retail. There are also 2 existing indexes that match 2 of the big groups. Motor Vehicles & Parts is a perfect match for Auto and Gas Stations are all about Motor Fuel Sales. The other 2 aggregates were created by me with the detailed help, guidance and approval of a great person at the US BLS. For Restaurants, I aggregated Food & Alcohol away from home. For Relevant Retail I removed the categories linked to Restaurants, Auto and Gas Stations from the All Commodities Group.

The numbers are concerning. Inflation in the Services segment is high, but nothing compared to Auto & Gas. Relevant Retail is much better than All Commodities but about equal to the national numbers which are so scary. Now, let’s apply inflation to the sales numbers. This will give us a measurement of the amount of product sold, not just $.

I can’t recall ever seeing such a radical difference. It’s hard to believe that we are talking about the same products being sold in the same outlets over the same period of time. March 2022 was the worst monthly Commodity inflation in history…or at least in the last 66 years. The impact is very clear across the board but anything to do with cars has been down in the amount sold every month this year. Restaurants is the only group doing well but they’re still recovering. For Relevant Retail, the March price explosion turned real sales negative for March and dropped the YTD sales increase down to +1.2%. March Real sales for Total U.S. Retail were also down but YTD actually turned negative too. I don’t know what to say but whatever that can be done, needs to be done … right now!

There is one faint glimmer of hope. In my research, I found that the months with the 3 worst average YOY Commodity inflation rates are March, February & January, in that order. An immediate turn around won’t happen but hopefully, the worst is over.

Now, as promised here is a condensed list of CPI Expenditure Categories. The highlighting shows how I matched the commodity categories with the big groups. If you look very closely, you will see fuel oil as a category is included in both Total & Relevant Retail. That might raise some questions. However, if you look at the NAICS codes for Retail Businesses, you’ll see that the company that delivers propane to your farm is classified as a Non-Store Retailer, just like internet businesses.

Take a look. Let me know if you see any expenditure categories that if aggregated, would be a better CPI match for an important retail channel.