Information by distribution channel

The Retail Market – Evolution 1992 > 2023

All aspects of the world are constantly changing. The Retail Marketplace is no exception as retailers try to meet the evolving wants and needs of consumers. When I was growing up, Traditional Department Stores and Brand-named products “ruled” the Retail Market. Now, the focus is on value (quality + price) and convenience so the Internet and the big “1 stop shopping” outlets like Warehouse Clubs, SuperCenters and Home Centers dominate the market. Plus, even smaller chain stores now offer a variety of private label products.

Total Retail grew from $2.0T in 1992 to $8.3T in 2023, a 312% increase – over 4 times more $ were spent. In this report we will try to identify the specific changes in the Retail Market from 1992 to 2023 that drove the increase. Some channels rose to prominence while others fell. The primary source of the data is the Census Bureau’s Monthly Retail Trade Report. This evolution report is long and complex. We will start with the Big Retail Groups then ultimately drill down to the individual channel level. The final results are relatively simple but the journey to our goal is very complicated. To make it easier for you to understand, I have created and included 38 graphs and charts so you can literally “see” the details of the 1992>2023 Retail Evolution. It will also reduce the amount of comments. We should also note that the data is in actual $. Inflation can certainly impact consumer spending, but we will focus on the amount spent. FYI – The CPI increased 117% from 1992>2023 and Commodities prices grew by 73.1% so Total Retail only had a 138% lift in the amount of product sold 92>23. Services were the overwhelming “leader” in raising prices – +153%.

Let’s get started. Our first two pie charts show the Total Retail market share for the Big Groups – Restaurants, Auto, Gas Stations and Relevant Retail in 1992 and 2023.

The 2 charts look very similar. There was no change in share for Gas Stations. Restaurants were the only group to gain share, +3.1%. I’m sure that a 150+% increase in prices was a big factor. The Auto group lost -1.7% but the big surprise was Relevant Retail losing -1.5%. They are now 59.9% but still slightly above their 92>23 average of 59.8%. This is rather calm. Let’s look at the cumulative growth by year in a line graph.

The first thing that you notice is that there are 2 big negative events – the Great Recession which hit bottom in 2009 and the 2020 Pandemic. The Recession drove sales down in all big groups. Auto was actually down in both 2008 & 2009. Their drop in 2008 was large enough to drive Total Retail down for that year too. Auto didn’t return to the sales level of 2007 until 2013. Gas Stations had a huge drop in 2009 but they recovered by 2011. Relevant Retail had a small drop. They almost recovered in 2010 but didn’t officially exceed 2008 sales until 2011. BTW, this was their only annual sales decrease since 1992. Restaurants had a miniscule drop and were back on track in 2010. As noted, sales in Total Retail were down in both 2008 & 2009. They fully recovered in 2011.

Now, the 2020 Pandemic. Sales decreased in Restaurants, Auto and Gas Stations but the lift in Relevant Retail was large enough to keep Total Retail slightly positive. Due to the “stay at home” attitude, the drops in Restaurants and Gas Stations were huge but all groups had recovered by 2021. Here are some 1992>2023 specifics.

Total Retail – 2023 sales = $8.294T; growth from 1992: +$6.280T (+311.8%); avg growth: +4.6%. They only had 2 annual decreases, in 2008 & 2009. The biggest drop was -7.4% in 2009. Their biggest lift was +18.4% in 2021.

Restaurants – 2023 sales = $1.094T; growth from 1992: +$891.2B (+493.3%); avg growth: +5.6%. They also have had only 2 drops, in 2009 & 2020. The biggest drop was -15.3% in 2020. Their biggest increase was +29.1% in 2021.

Auto – 2023 sales = $1.583T; growth from 1992: +$1.165T (+278.3%); avg growth: +4.4%. They have had 3 down years, in 2008, 2009 & 2020. The worst was -14.5% in 2009. Their best year was +22.5% in 2021.

Gas Stations – 2023 sales = $650.1B; growth from 1992: +$493.8B (+315.9%); avg growth: +4.7%. As you can see on the chart, their sales have been on an up/down roller coaster ride for the last 20 years. Interestingly enough, in 2023 they are at about the same level as they would have been if they had just maintained their 1992>2003 growth rate. They’ve had 10 down years, the worst was -22.3% in 2009 but 4 drops, including 23 were over 10%. Their best year was +33.4% in 2021 but 10 were in double digits. Prices are up 216% since 1992, with big fluctuations, which explains the rollercoaster.

Relevant Retail (Less Restaurants, Auto & Gas) – 2023 sales = $4.967T; growth from 1992: +$3.731T (+301.7%); avg growth: +4.6%. As we noted, their only down year was 2009, -3.6%. In fact, they only had one other year below +2.0% –  +0.5% in 2008. Their best year was +13.7% in 2021 and was the only year that their increase exceeded 10%. They are the epitome of consistency. Their share of Total Retail has been 59>59.9% in all but 7 years. In those years, it ranged from 60.2% in 2008 to 63.2% in 2020. Two of the 60+ years were 1992>93 at the start of our analysis, but five – 2008>10 & 2020>21 occurred when the country was in crisis. Relevant Retail includes a variety of channels that often have a radically different reaction to trends and outside influences. However, they always manage to “unite” to produce consistent growth for this big group.

In our next analytical step, we will begin to drill down into Relevant Retail to see the specifics behind the consistent growth in the largest member of the Big Groups. It is the area of most interest to the CPG industry. We start with pie charts showing the 1992 & 2023 share of dollars of the large channel Subgroups.

Unlike Total Pet, you immediately see a major difference in the 2 charts. With a 21.1% increase in share, NonStore moved up from #7 to #1. All other subgroups but Health & Drug loss share. The biggest decrease was -10.3% by Food & Beverage, the former leader. The smallest drop was -0.6% by Building Materials/Farm. Obviously, this deserves a closer look. We will turn to line charts covering 1992>2023 sales. To make them easier to read, they are divided into 3 groups based on the % size of their 92>23 increase. We will start with the lowest performers and work our way to the top.

With some slight variations, all 3 had a very similar pattern. They also more than doubled their sales but that was significantly below the overall quadrupling by Relevant Retail.

Furniture, Appliances & Electronics – $230.6B; +$129.5B (+128.2%); avg: +2.7%. They had the biggest Recession drop, -17.5% which started in 2008. They actually didn’t recover to the 2007 level until the 24.9% lift in 2021, after the 2020, -10.8% COVID drop.

Sport, Book, Hobby, Music – $102.1B; +59.1B (+137.6%); avg: +2.8%. They had the smallest Recession drop and sales were down before COVID. They actually grew in 2020. Worst year: 2018 (-4.7%); Best year: 2021 (+22.5%).

Clothing & Access – $307.1B; +$187.0B (+155.7%); avg: +3.1%. They had drops in 2008>09 & 2020 but quickly recovered. Worst year: 2020 (-24.8%); Best year 2021 (+45.1%).

You see some distinct differences in the patterns of this mid-level group. While their 1992>2023 increases were all below Relevant Retail, all Subgroups except Food & Beverage at least tripled their sales vs 1992.

Food & Beverage – $979.2B; +$608.6B (+164.3%); avg: +3.2%. They have had relatively low growth, but it has been very consistent. They had only 1 down year, 2009 and the drop was small, -0.2%. Their biggest lift was +9.3% in 2020. Their growth accelerated from 2020>2023. This was primarily due to 2 factors – the move to eat at home and strong inflation.

Miscellaneous Stores (includes Pet) – $173.4B; +$118.5B (+216.2%); avg: +3.8%. They had drops in 2001>03, 2008>09 & 2020. The biggest decrease was -8.1% in 2009 and they didn’t recover to the 2007 level until 2015. The 2020 drop was a different story. They recovered immediately in 2021 with the biggest lift in history, +24.2%. This was their first double digit lift since +12.9% in 1994. Growth slowed markedly to +1.2% in 2023.

General Mdse – $884.2B; +$636.3B (+256.7%); avg: +4.2%. Although their growth is bigger, they have a pattern very similar to Food & Bvg. They have only 1 drop. It also occurred in 2009 and was minor, -1.0%. They also had no double digit increases but their biggest lift was in 2021, +9.4%, not 2020 and their growth after COVID was a little stronger.

Building Material/Farm – $495.2B; +$364.2B (+278.0%); avg: +4.4%. Their pattern was very different. Sales fell from 2007 through 2010 and also in 2023. The biggest drop was -13.3% in 2009. Plus, their growth accelerated in 2020 and continued through 2022. The biggest lift was +14.3% in 2021 but 2020 was 2nd with +13.0%. Now, the top performers…

As you can see, there were only 2 Subgroups whose growth exceeded Relevant Retail – Health/Drug & NonStore. While Health/Drug had consistent growth, NonStore accelerated in 2010 and then skyrocketed in 2020.

Health & Drug – $435.7B; +$346.0B (+385.7%); avg: +5.2%. Their growth was definitely consistent as they were the only Subgroup with no decreases in sales. Their smallest lift was +0.9% in 2012. They only had 1 double digit increase, +10.1% in 1999. Sales did increase +9.0% in 2021 & +8.1% in 2023 but their strongest growth was 1996>2003 – avg: +8.3%.

NonStore – $1.360T; +$1.281T (+1632.1%); avg: +9.6%. Their spectacular growth is obviously being driven by the internet. They did have 1 down year, -2.5% in 2009. Sales took off in 2010 then exploded with a 29.3% lift in 2020. Every year 2017>2023 had a double-digit increase. Consumers seek value & convenience, which is the internet game plan.

The next pie chart shows each Subgroup’s share of Relevant Retail’s total growth. If you divide the share of growth by the share of 1992 sales you get a measure of performance. The bar graph allows you to compare the results.

As expected, NonStore drove the growth and their performance was “off the chart”. Performance must exceed 100% for a group to “earn its share”. Only NonStore and Health/Drug exceeded 100%. All others underperformed. This is interesting but not really usable. We must “drill down” to the channel level to find out what is really happening in Retail. We will do that by analyzing key channels within the Subgroups, starting with Furniture, Appliance & Electronics stores.

The Subgroup loss 3.6% share of Relevant Retail. Within the subgroup, Electronics lost almost 25% of its share of group $. Most was picked up by Furniture but a little by Appliances. Let’s look at their cumulative growth by year in a line graph.

All had big drops in 2009 but Appliance sales increased in 2020. They have similar patterns but with some differences.

Relevant Retail: +301.7% Furniture, Appliance, Electronics Subgroup: 128.2%

Electronics – $70.4B; +$30.2B (+74.9%); avg: +1.8%; They had strong consistent growth through 2007. Since then, they have been on a rollercoaster but trending down from their 2007 peak. Biggest Chges – ↑: 2021: +28.8%; ↓: 2020: -23.5%

Appliance – $21.5B; +$13.1B (+154.8%); avg: +3.1%; They had a big 2008 & 2009 recession drop but sales actually grew in 2020 and after, until dropping in 2023. Biggest Changes – ↑: 2021: +16.5%; ↓: 2009: -10.0%

Furniture – $138.7B; +86.3B (+164.9%); avg: +3.2%; $ dropped 2007>2009, 2020 & 2023. The biggest decrease was -14.2% in 2009. In 2007 their growth fell below the subgroup. They have exceeded it 2016>23. Biggest lift – 2021: +24.3%

Building Material/Farm

The Subgroup lost only -0.6% share of Relevant Retail $. Within the Subgroup, Homecenters “rule” and only they gained share, +5.9%. The drops were pretty balanced, ranging from -1.5% for Hardware to -2.2% for Farm and Paint/Wallpaper.

Homecenters obviously drive the Subgroup’s business. Sales for all channels fell during the recession but grew in the pandemic as consumers focused on “home”.

Relevant Retail: +301.7%     Building Materials/Farm Subgroup: 278.0%

Paint/Wallpaper – $17.2B; +$9.7B (+129.3%); avg: +2.7%; They had a long 2007>2009 drop. The biggest decrease was in 2009, -15.5%. They didn’t recover until 2015. Their biggest lift was +10.8% in 2005 but 2022 was a close 2nd, +10.3%.

Hardware – $40.8B; +$28.1B (+221.9%); avg: +3.8%; Their recession decrease was 2008>2009 with the biggest drop in 2009, -7.0%. They recovered in 2012. They’ve only had 3 drops since 92 but they’ve only had 1 10+% lift, +20.4% in 2020.

Farm – $67.4B; +$46.7B (+226.0%); avg: +3.9%; They have had 4 occasional 1 year decreases. The biggest was -11.8% in 2009. Their largest lift was +18.6% in 2021, which surpassed +16.7% in 2020.

Homecenters – $369.8B; +279.6B (+310.2%); avg: +4.7%; Their growth slightly exceeded Relevant Retail, so they gained share. They have always led the group in cumulative growth. They’ve only had 5 drops – 2007>10 & 2023. The biggest decrease was -13.3% in 2009. Their 2 biggest increases were +14.3% in 2021, which beat +13.0% in 2020.

Food & Beverage

Food & Bvg was the biggest loser in share of Relevant Retail, -10.3%. Within the Subgroup there was little change. Supermarkets still have 85% of the $. However, Alcohol Stores were the only channel that gained share, +1.5%.

The Subgroup has shown consistent growth with only 1 down year, -0.2% in 2009. Alcohol Stores have been the growth leader since 2006. Only Convenience Stores have had a lot of fluctuations. The others have very consistent patterns.

Relevant Retail: +301.7%     Food & Beverage Subgroup: 164.3%

Convenience Stores – $42.9B; +$22.9B (114.4%); avg: +2.5%; There have been a lot of ups & downs since 2001 with 8 drops. One lasted from 2007>09. The biggest were 2009: -7.4%; 2020: -5.0%. The biggest lifts: 2021: 20.6%; 2022: 19.6%.

Specialty Food – $29.8B; +$18.3B (+160.1%); avg: +3.1%; They have had slow, but consistent growth with only 1 down year, -2.2% in 2009. Their big COVID lift, +11.7% didn’t happen until 2021 but strong growth continued through 2023.

Supermarkets – $834.5B; +$517.1B (+162.9%); avg: +3.2%; Although they have lost a big share of Relevant Retail $, their growth has been very consistent. They have had no decreases since 1992. Their smallest increase was +0.1% in 2009. As expected, their biggest lift occurred in 2020, +10.1%. It was their only double-digit increase.

Beer, Wine & Liquor – $72.0B; +$50.3B (+231.9%); avg: +3.9%; Their growth is 42% more than Supermarkets. It has also been consistent with drops in only 1993 (-0.7%) & 1995 (-0.5%). Their biggest & only double-digit lift was +16.1% in 2020.

Health & Drug Subgroup

Health/Drug gained 1.5% in share of Relevant Retail. NonStore had the biggest gain and was the only other Subgroup to gain share. Drug had a big sales increase but their share of $ within the Subgroup actually decreased by -3.2%.

The Subgroup has shown consistent, above average growth, +5.2%. They have had no down years, but only 1 year with a double digit increase, +10.1% in 1999. Non-Drug Store $ took a big dive in 2020, but it had little impact on the Subgroup.

Relevant Retail: +301.7%     Health & Drug Subgroup: +385.3%

Cosmetic, Optical, Health – $71.8B; +$59.9B (503.0%); avg: +6.0%; Except for a small drop in 2009 and a big one in 2020, -11.0% they have had steady growth. It has accelerated since 2010. The biggest lift, +22.0%, was in their 2021 recovery.

Drug – $363B; +$286.1B (+367.8%); avg: +5.1%; They have had only 1 down year, -0.6% in 2012.  Their biggest lift and only double-digit increase, +11.9% occurred back in 1999. Obviously, Drug “rules” this Subgroup but the lift is somewhat deceptive. Actual Drug Stores, both chain and independent have been struggling recently as a huge number of Grocery & General Mdse stores have added a pharmacy within the store and online pharmacies have become a major force. The online only companies are still classified as Drug Stores, even though they have no physical outlets.

Clothing & Accessories

The Clothing & Acc. Subgroup’s share of Relevant Retail $ fell from 9.7% to 6.2%, a 36% drop. Within the Subgroup, only Jewelry, Luggage, Leather gained share. Shoes’ share fell -2.5% but the big Clothing channel only lost -0.3%.

All channels have a similar pattern, with Recession & COVID drops. Clothing is definitely the driving force. This is very apparent as the sales pattern of the Subgroup almost exactly matches the pattern of Clothing.

Relevant Retail: +301.7%     Clothing & Accessories Subgroup: +155.7%

Shoe Stores – $40.0B; +$21.4B (+114.7%); avg: +2.5%; They had 5 annual dips in $, including 2023. Sales dropped -4.9% in 2009 but -21.2% in 2020. They had a strong recovery, +34.1% in 2021. These were their only double-digit changes.

Clothing – $217.3B; +132.0B (+154.6%); avg: +3.1%; They only had 3 annual decreases, 2008, 2009 and the biggest, -29% in 2020. They had a huge recovery lift of +45.4% in 2021. Like Shoes, these were their only double-digit changes.

Jewelry, Luggage, Leather – $49.8B; +$33.7B (+208.9%); avg: +3.7%; They had the largest increase but also the most fluctuation – 7 decreases. The worst drop was -11.2% in 2009. They had a huge 53.6% lift in 2021 after -5.4% in 2020.

Sporting Goods, Hobby, Toy, Book, Music

This smallest, “entertainment” Subgroup lost -1.4% in share of Relevant Retl $, -40%. Within the Subgroup, Sporting Gds’ share jumped from 36.3% to 61.4%. The other 3 channels all had significant losses, with Books leading the pack, -11.3%.

Sporting Goods moved to the top in 2006 and stayed there. Toy/Hobby/Game essentially stabilized while Book and Sewing/Music/News began to decline. All had their biggest lift in 2021 then growth flattened or declined.

Relevant Retail: +301.7%     Sporting Goods, Toy, Hobby, Book, Music Subgroup: +137.6%

Book Stores – $9.7B; -$0.01B (-0.1%); avg: -0.002%; With the rise of the internet, sales have trended down since 2008. Their biggest drop, -30.0% was in 2020, followed by a +29.7% lift in 2021. They are 1 of only 2 negative channels.

Sewing, Music, News – $9.7B; +$1.9B (+24.3%); avg: +0.7%; This group also includes CD stores. Sales turned down in 2008, then stabilized until a -11.4% drop in 2020 which was followed by their biggest lift, +9.9% in 2021.

Toy, Hobby, Game – $21.4B; +$10.2B (+90.3%); avg: +2.1%; Sales were stable around $16B from 1998 to 2013, when they turned slightly up. $ fell 2017>19, grew 2020>22 then dropped in 23. Biggest changes: 2018, -7.3%; 2021, +26.4%.

Sporting Goods – $62.7B; +$47.1B (+302.2%); avg: +4.6%; Unlike the others, this channel is driven by physical activity. Its growth is strong, even exceeding Relevant Retail. Sales dropped in 2009, 2017>18 & 2022>23. The biggest drop was -4.5% in both 2017 & 2018. Their sales actually grew +16.6% in 2020, but they beat that with a +22.3% lift in 2021.

General Merchandise

This Subgroup lost 2.2% in its share of Relevant Retail $. Within the Subgroup, there were huge changes. While $/Value stores essentially held their place, -0.5%, Clubs/SuperCenters’ share skyrocketed from 16.1% to 73.1%. Department Stores – Traditional & Discount paid the price. Their combined share fell from 71.5% in 1992 to 15.0% in 2023.

You see 3 different patterns. 1. Strong Growth: Club/SupCtr; 2. Stability: $/Value; 3. Decline: Dept Stores

Relevant Retail: +301.7%     General Merchandise Subgroup: +256.7%

Traditional Department Stores – $29.9B; -$55.2B (-64.8%); avg: -3.3%; They have been fading for years with only 11 “up” years since 1992. Their biggest drop was -46.2% in 2020 but they “recovered” with a +46.6% lift in 2021.

Discount Department Stores – $102.7B; +10.8B (11.8%); avg; +0.4%; They are also fading, with only 4 “up” years since 2001. In fact, they are going away. Many are adding a big grocery section. They will be SupCtrs. The others, just Dept Strs.

$/Value Stores – $105.5B; +$74.7B (242.8%); avg: +4.1%; They evolved from 5&10¢ Stores. They have had steady, mid-level growth with no drops since 1998, but some stores are now struggling, especially with high cumulative inflation. Their biggest lift was +12.7% in 2020.

Warehouse Clubs/SuperCenters – $646.1B; +$606.0B (1514.1%); avg: +9.4%; They have become the dominant General Merchandise channel and their impact on the Relevant Retail Marketplace is second only to the Internet. They have had no down years. Their smallest lift was +0.9% in 2009. They had all double digit increases until 2006. Their biggest increase this century was +18.0% back in 2001.

Miscellaneous Stores

This small, mixed Subgroup lost only 0.9% share of Relevant Retail $. Within the group, A/O Miscellaneous (includes Pet) became dominant. Used Mdse also gained ground. The other 2 channels had double digit losses in share.

A mixture of channels & patterns – Growth, Stability, Decline. All had recession drops & sales for all, but A/O fell in 2020.

Relevant Retail: +301.7%     Miscellaneous Store Subgroup: +216.2%

Office – $9.5B; +0.4B (+3.8%); avg: +0.1%; They have been headed down since 2007, with a sales decrease every year. The biggest drop was -8.8% in 2009. Their biggest lift, +21.2% happened over 30 years ago in 1993.

Gift & Souvenir – $20.5B; +$8.2B (+67.4%); avg: +1.7%; For years their sales were steady around $17>18B. They had big drops in 2009 & 2020. They recovered strongly from COVID, +29.9% in 2021 and hit a new $ high, $21.2B in 2022.

A/O Miscellaneous – $118.9B; +$91.0B (+326.7%); avg: +4.8%; This mixed group has had strong, steady growth since an  -8.1% drop in 2009, including a +22.5% lift in 2021. Their growth exceeds Relevant Retail’s increase.

Used Merchandise – $24.5B; +$18.9B (+340.0%); avg: +4.9%; As consumers’ have become more focused on value, the appeal of this channel has increased. They had drops in 2009 & 2020 (-9.7%) but a huge, +35.4% lift in 2021.

NonStore

Thanks to the Internet, NonStore gained 21.1% in share and now have the biggest portion of Relevant Retail $, 27.4%. With 91.4% of the $, the Internet essentially owns the NonStore Subgroup.

Fuel & Other Direct more than doubled sales but that is nothing compared to the Internet, which sold 35 times more $.

Relevant Retail: +301.7%     NonStore Subgroup: +1632.1%

Fuel Dealers – $40.0B; +$23.3B (+140.0%); avg: +2.9%; This small channel had 16 double digit sales changes. The worst was -23.2% in 2009. The best was +34.0% in 2000. We should note that they were -15.6% in 23 after being +33.1% in 22.

Other Direct Sellers – $76.8B (+188.6%); avg: +3.5%; Their only down years were 2001 & 2008>10. The biggest drop was -9.2% in 2009. Their biggest lift was +12.3% in 2021. They had only 1 other double digit change, +10.8% back in 1994.

Internet/Mail/TV – $1.243T; +$1.208T (+3429.9%); avg: +12.2%; Since 1992 they have had no down years and 23 years with double digit growth. Best yr: +34.1% in 2020. With Selection, Value & Convenience, they are now America’s choice.

Now, it’s time to wrap our analysis up and lay out the results. The best way to compare channels is by Performance – divide a channel’s share of Relevant Retail’s growth by their 1992 share of $ales. Channels with a score of 100+% are earning their share. Here are the results for 29 channels.

There were only 2 Subgroups with 100+% Performance. There are 8 individual channels. Here are the 100+% Winners:

  • Internet/Mail 1137%
  • Clubs/SupCtrs 502%
  • NonDrug Health 167%
  • Drug Stores 122%
  • Used Mdse 113%
  • A/O Misc. 108%
  • Homecenters 103%
  • Sporting Goods 100%

If performance is 30% or less, the channel is likely in trouble. Here are the 8 Worst Performers:

  • Hobby,Toy,Game 30%
  • Electronics 25%
  • Gift/Souvenir 22%
  • Sewing/Music 8%
  • Disc Dept Strs 4%
  • Office 1%
  • Book -0.01%
  • Reg Dept Strs -21%

Many of the other 13 channels have problems but right now are getting by. In fact, if you take NonStore out of total $, the 4 with a score of 70>99% are “winning” their battle against other brick ‘n mortar retailers with 100+% performance.

Summary

Key Consumer Drivers – Value (Quality + Price), Convenience, Selection along with a big drop in the importance of Brand

Biggest Retail Market Changes:

  1. Consumers’ Movement to online shopping – mostly to NonStore but also in Brick ‘n Mortar Retailers
  2. Growth of Warehouse Clubs & SuperCenters, largely at the expense of Grocery & Department Stores
  3. The fall of Department Stores – Traditional & Discount
  4. The increasing demise of Big Box Specialty Retailers – especially Books, CD’s, DVD’s, Toy, Game, Electronics…

Retail Channel $ Update – February Monthly & March Advance

In March, Commodities inflation vs last year rose from 0.3% in February to 0.6%. Although down from its peak, cumulative inflation still impacts consumer spending. The YOY sales increase for March is 36% below average for Relevant Retail and for all but 2 channels. Prices are now deflating in a number of channels but still high vs 21 which slows growth in the amount of product sold. There is still a long road to recovery, so we’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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

We will begin with the February Monthly Report and then go to the March Advance Report. Our focus is comparing to last year but also 2021 & 2019. We’ll show both actual and the “real” change in sales as we factor inflation into the data.

Both reports include the following:

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

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

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

First the February Monthly. All but Relevant Retail were up from January and all but Gas Stations were up vs 23, 21 & 19. Considering inflation, Gas Stations had the only drop vs 23 or 21. There were 4 in Dec & Jan. Gas Stations are still really down vs 2019 but for the 4th straight month, Relevant Retail is “really” up vs all years. ($ are Not Seasonally Adjusted)

The February Monthly is $4.1B more than the Advance report. Restaurants: +$0.1B; Auto: +$1.9B; Gas Stations: +$0.4B; Relevant Retail: +$1.6B. Surprisingly, $ were up vs January for all but Relevant Retail. Actual sales for all but Gas Stations were positive in all measurements vs 23, 21 & 19. Gas prices fell but Gas Stations sales were down vs 23. There were only 2 “real” sales drops – both from Gas Stations. All measurements (actual & real) vs 23, 21 & 19 were positive for Auto, Restaurants, Total & Relevant Retail. Restaurants have the biggest increases vs 21 & 19 but Relevant Retail is still the top “real” performer vs 2019. However, only 54% of their growth is real.

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

Overall– 8 of 11 were up from January. vs Feb 23, 8 were actually and 9 “really” up. Vs Feb 21, All were up and 8 were real increases. Vs 2019, Off/Gift/Souv were actually & really down. All others were up in both measurements.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 32.3% since 2019. Prices for the Bldg/Matl group have inflated 19.7% since 2021 which is having an impact. Both HomeCtr/Hdwe and Farm stores are only actually up vs 21 & 19. Deflation pushed Home Ctr/Hdwe really positive vs Feb 23 and they are again really up vs 19. Other real measurements vs 23 & 21 are negative for both and only 25% of the overall Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.5%, Real: 1.3%; Farm: 7.2%, Real: 3.0%
  • Food & Drug – Both are truly essential. Except for the pandemic food binge buying, they tend to have smaller changes in $. The inflation situation has flipped as the Grocery rate is now 66% lower than Drug/Med products. Both are down from January in $. Drug Stores are positive in all other measurements and 67% of their 2019>24 growth is real. All actual $ are up for Supermarkets and inflation is slowing but their 24 real sales are still down vs 21. Only 14% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.7%, Real: +0.9%; Drug Stores: +4.9%, Real: +3.4%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 1.5% from January and their only negative is real Ytd vs 21. Prices are still deflating, -1.8% vs 23. Deflation started in April 23 and is a big change from +1.1% in 22>23 and +7.1% in 21>22. The result is that 65.2% of their 49.4% lift since 2019 is real. Their Avg 19>24 Growth Rate is: +8.4%; Real: +5.7%.
  • Gen Mdse Stores – All were up vs January. Actual sales vs 21 & 19 were up for all. In fact, the only negatives came from Discount Department Stores. They were actually down Ytd vs 23 and really down Ytd vs 23 & 21. They are again really positive vs 19 but only 21% of their growth is real. The other channels average 47% in real growth. Avg 19>24 Growth: SupCtr/Club: 5.9%, Real: 2.7%; $/Value Strs: +6.8%, Real: +3.6%; Disc. Dept. Strs: +2.6%, Real: +0.6%
  • Office, Gift & Souvenir Stores – Actual sales are up slightly, +0.4% from January but they are negative in all actual measurements but vs 21. Their real sales numbers are all negative but vs February 21. This includes negatives vs 2019. Their recovery started late, and their slow progress has been stalled since June 23. Avg Growth Rate: -0.9%, Real: -2.8%
  • Internet/Mail Order – $ are down -4.7% from January but set a new monthly record of $100.3B. All measurements are positive, but their growth is only 68.2% of their average since 2019. However, 82.9% of their 121.9% growth since 2019 is real. Avg Growth: +17.3%, Real: +15.0%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, rose in Sep>Nov, fell in Dec>Jan, then grew in Feb. All measurements vs 23, 21 & 19 are positive. They are in 2nd place, behind the Internet, in the % increase vs 19 but the leader vs 21. Also, 78% of their 73.8% growth since 2019 is real. Average 19>24 Growth: +11.7%, Real: +9.5%.

February was a big, positive surprise. It is usually the retail low point of the year but not in 24. Sales in 8 channels were up vs January and vs February 23. Prices are now deflating in a number of channels so 9 channels were really up vs 23. Cumulative inflation is still a factor. Sales increases are lower and 6 of 11 channels were really down Ytd vs 21 but slow improvement continues. The commodities CPI increased slightly in March. Let’s look for any impact on Retail $ales.

March sales vs February grew for all big groups – no surprise. Except for 2020, a Feb>Mar Total Retail lift has happened every year since 1992. However, the 10.1% lift is 27% below the average of 13.7%. All actual $ measurements are positive vs 23, 21 & 19 for all groups but Gas Stations vs 22 and Auto vs Mar 23 & 21. Only Restaurants have an above average lift vs March 23. Auto & Gas $ are down while Total & Relevant Retail are 36+% below average. Inflation is still a big factor. The rate for all commodities, the best pricing measure for Retail, grew from 0.3% to 0.6% and is 16.6% vs 21. There is some “real” bad news. In February only 1 measurement was “really” down vs 23 & 21 and it came from Gas Stations. In March, 7 were really down – 3 from Gas Stations. Relevant Retail’s real monthly sales vs last year have now been positive for 9 straight months, but after 4 straight months of all positives, their real sales vs March 21 are down.

Overall – Inflation Reality – For Total Retail, inflation grew and real sales vs March 21 turned negative. For Restaurants, inflation remains high, +4.1% but they are really positive vs 23 & 21. Gas prices rose and that group is still in turmoil. Auto prices are down but still up 18.6% vs 21 which has slowed actual & real sales. Prices are slightly deflating for Relevant Retail but their real sales are now down vs March 21, after 4 months of all positives. Their progress is slowing.

Total Retail – Since June 20, every month but April 23 has set a monthly sales record. In 2023 Sales were on a roller coaster. Up in Jul>Aug, down in Sept, up in Oct>Dec, down in Jan 24, surprisingly up in Feb and again in March. Inflation grew but is only 0.6%. YOY sales growth is still low. Sales are up 3.3% Ytd vs last year, but this is only 46% of their avg 19>24 growth. Real sales vs Mar 21 turned negative and only 41% of the 19>24 growth is real. YOY inflation in Total Retail has significantly slowed but we see its cumulative impact. Growth: 23>24: 3.3%; Avg 19>24: +7.2%, Real: +3.3%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $96B in December 23 and exceeding $1T for the 1st time. They have the biggest increases vs 23, 21 & 19 and all real sales are positive. Inflation slowed to 4.1% from 4.5% last month but is still +20.8% vs 21 and +25.8% vs 19. 39.5% of their 51.2% growth since 19 is real and they remain 3rd in performance behind Relevant & Total. Recovery started late but inflation started early. Growth: 6.6%; Avg 19>24:+8.6%, Real: +3.7%. They just account for 13.5% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – They actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their Y/E real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 was a true rollercoaster but the $ set a new record, $1.595T. $ fell in Jan 24 but grew in Feb>Mar. However, actual & real $ vs Mar 23 & 21 are negative plus real Ytd vs 21. Prices vs 23 are -0.8%. Only 23% of 19>24 growth is real. Growth: 2.1%; Avg 19>24: +6.0%, Real: +1.5%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In August they rose to -3.7%. In Sep they were +2.7% but began deflating to -4.2% in Feb. In Mar they are +1.0%. Pricing is a big factor in the $ drop vs 23 but real $ vs Mar 21 & Ytd vs 21 & 19 are also negative. Growth: -3.0%; Avg 19>24: +5.4%, Real: -1.0%. They show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, sales continued on the roller coaster. A December lift set a new monthly record of $494.7B and annual record of $4.997T. Sales fell in Jan>Feb 24 but rose in March, which is normal. However, the 9.5% lift is 24% below the 92>23 avg and the YOY lift of 3.1% is down 36% from avg. Also, real sales vs Mar 21 turned negative after 4 straight months of all positives. However, 54% of their 44.2% 19>24 growth is real – #1 in performance. Growth: 3.8%; Avg 19>24: +7.6%, Real: +4.3%. This is where America shops. They finished 2023 and started up 2024 strong but in March their recovery appears to be slowing. This is concerning.

Inflation is still low, but the cumulative impact is still there. Sales increases are still small, which is very evident in March. It is also significant that the number of real drops vs 23 & 21 increased to 7 from 1 in February. Restaurants are still doing well, but the Auto group has now joined Gas Stations in turmoil. Although not as visible, the biggest concern is with Relevant Retail. Sales increases are markedly lower and real sales vs Mar 21 turned negative after 4 months of all positives. Consumers are still spending more $ and generally buying more product, but progress has definitely slowed.

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

  • Relevant Retail: Growth: 3.8%; Avg: +7.6%, Real: +4.3%. All were up from Feb. Vs Mar 23: 5 were up, Real: 7. Vs Mar 21: 6 were up, Real: 4. Vs 19: All were actually up. Only Dept Stores & Furnishing stores were really down.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are up 11.8% from February. Their actual $ are only up Ytd vs 21 & 19. Their real numbers are only up vs Mar 23, +0.8%. They are even really down vs 2019. Growth: -1.4%; Avg 19>24: +0.4%, Real: -1.6%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are +13.2% from February. In fact, both actual and real sales are positive in all measurements. However, only 44% of their 33.9% 19>24 lift is real – inflation’s impact. Note: Growth exceeds Avg. Growth: 6.1%; Avg: +6.0%, Real: +2.8%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Actual $ are +8.3% from February and up monthly and Ytd vs 22, 21 & 19. However, inflation hit them hard. Real $ are down vs 21 and only 14% of the growth since 2019 is real. Growth: 2.8%; Avg 19>24: +5.7%, Real: +0.9%.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are +5.4% from Feb. Actual $ are down vs Mar 23 and real $ are down vs Mar 23 & 21. Inflation has been low so 66% of their 27% growth from 2019 is real. Note: Their growth is now below the 19>24 avg. Growth: 3.6%; Avg 19>24: +4.9%, Real: +3.3%
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales are up 15.4% from February and positive in all comparisons, actual & real vs 22, 21 & 19 except real sales vs Mar 21. Plus, 70% of their 19>24 growth is real. Growth: 3.4%; Avg 19>24: +3.8%, Real:+2.7%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were high in 2022. Sales are +10.2% from January but negative in all other measurements but actual Ytd sales vs 2019. They have sold less product in 2024 than 2019. Growth: -8.4%; Avg 19>24: +2.3%, Real: -0.5%
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are up only 3.2% from February. This small lift caused actual $ vs Mar 23 & 21 to turn negative. Other measurements are positive. Note: Their growth again exceeds the average. Growth: 1.3%; Avg 19>24: +0.6%, Real: +3.3%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices are still deflating, and sales are up 14.6% from February but they are only positive vs 2019. Prices may be deflating but they are still high, 18.8% above 21. Real sales are negative for all but Ytd vs 21 & 19. Also, just 24% of their 19>24 sales growth is real. Growth: -5.1%; Avg 19>24: +5.6%, Real: +1.5%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. Actual sales are +14.4% from February but down for all but Ytd vs 2019. The only positive real sales measurements are Ytd vs 23 & 19. Their inflation rate has been lower than most groups so 73% of their 29.3% growth since 2019 is real. Growth: -1.5%; Avg 19>24: +5.3%, Real: +3.9%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are +10.9% vs February and are again positive in all measurements – both actual & real. They are still 2nd to NonStore outlets in the percentage increase vs 19 and vs 21. 73% of their 53.6% 19>24 growth is real. Growth: 4.6%; Avg 19>24: +9.0%, Real: 6.8%.
  • NonStore Retailers – 90% of their $ comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. $ales are +6.4% from February. Their YOY growth fell to +5.6% in Mar 24, 44% below average, but they are positive in all measurements. 81% of their 106.5% 2019>24 growth is real. Growth: 8.7%; Avg: +15.6%, Real: +13.3%

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its June 22 peak, which has helped the Retail Situation. As expected, Sales grew from February. However, the lift was below average for most channels. The YOY monthly increase is also slowing. The Relevant Retail lift vs Mar 23 was 36% below its average 4.9% increase and 6 of 11 channels actually had a decrease. Among the 5 with increases, only SupCtr/$ Stores had a double-digit lift over 23. Inflation is low and now slightly deflating in most channels. However, we are still seeing the impact of high cumulative inflation. Only a few channels are doing well. The slowing of the  YOY sales increase has become the biggest problem. In March, only SupCtr/Club/$ & Electronics had a Ytd lift above their 19>24 Avg, down from 3 in February, which was still bad. Relevant Retail is now really down Ytd vs 21, after 4 straight months of all positives. The recovery has definitely slowed.

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

Monthly YOY 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 Sales – The Path from 2019 to 2023

In this report we fill take a closer look at the Retail journey from 2019 to 2023. It was a traumatic time for America and the retail marketplace. We experienced a massive pandemic followed by the worst inflation in 40 years. Granted, much of the pricing surge was started by supply chain issues due to the pandemic. However, they were different problems with different solutions for recovery.

Our analysis will include an overview of annual retail sales from 2019 to 2023 followed by a more in depth look in which we factor inflation into the numbers. This gives us a “real” view of the situation as it shows the change in the amount of product sold. We will look at the Big Retail groups then drill deeper into the pet relevant channels. First, here is an overview of the Big 4 Groups and Total Retail.

You immediately see the impact of the 2020 pandemic as sales dropped in Restaurants, Auto and Gas Stations. The drops were especially large in Restaurants and Gas Stations due to closures and the “stay at home” attitude. Total Retail had an increase every year, even 2020. The 2020 lift was solely due to Relevant Retail. They are the only member of the Big 4 to have consistent annual growth. The only drop outside of 2020 was by Gas Stations. They had ridiculously high inflation. In 2023, it’s cumulative impact was very visible as their total $ dropped. Now, let’s look a little deeper. The next chart tracks the actual and real (inflation factored in) annual $ changes. We have included 2018>19 so that you can compare 19>23 to a pre-pandemic year.

The first thing that you notice is that there are a lot more negatives. There were 9 “real” annual sales drops added to the 4 actual drops. 36% of all real annual measurements were negative. Plus, the average real growth in Gas Stations is negative. Only 16% of actual annual sales measurements were negative. This clearly demonstrates the impact of inflation. Another result of inflation is very evident. All groups and Total Retail had a strong COVID recovery with their biggest lift occurring in 2021. Inflation peaked in 2022. You will note that the annual actual increases were progressively smaller in 2022 & 2023 – another immediate and cumulative impact of inflation.

Now let’s take a more detailed look at each of the big groups.

Total Retail – Thanks to Relevant Retail, they eked out a +0.9% increase in 2020. Commodity prices actually deflated -0.3% in 2020. Things changed in 2021. They had a strong 18.4% recovery as sales grew by $1.1T. However, strong inflation began, +7.8% so only 53% of the growth was real. The 21>22 increase slowed to 9.6% but Inflation grew to 10.9%. (Peak: June, 13.6%) The result was a -1.2% drop in real sales. Inflation slowed to 1.2% in 23 but the $ increase dropped to 3.2%, about the same as 18>19 but 59% below average. However, 60% was real.

Restaurants – They were hit hard by the pandemic as sales fell -15.7%. Inflation also slowed from 3% to 2%. Consumers returned to eating out in 2021. Sales increased 29.5%, despite the fact that inflation more than doubled to 4.4%. The increase slowed to 15.7% in 2022 as inflation peaked at 7.5%. In 2023, sales growth was still in double digits at 11.3% and inflation fell slightly to 7.0%. But you see clear evidence of its cumulative impact. In 21, 81% of their growth was real. In 23, it was down to 35%. Overall, 36% of their 40.6% 19>23 growth is real.

Auto – In 2019, prior to the pandemic, they had a small, 2.6% increase and inflation was only 0.7%. The pandemic brought a small, -2.3% drop in sales and inflation inched up to 1.6%. In 2021, sales took off, +22.8%, but so did inflation, 13.9% (the peak). Only 35% of the growth was real. In 22, inflation was 11.4%. Sales were only up 3.1% so real sales were down -7.5%. In 23, prices deflated -1.4% and sales grew by 4.2%. However, just 5% of their 28.9% growth since 2019 is real. Essentially, they are selling the same amount as 2019, but charging 27.1% more.

Gas Stations – Amazingly, prices deflated in 2019, -3.6%, but sales still fell -1.9% because consumers only bought 1.8% more gas. Sales plummeted -16.4% in 2020, despite a -16.3% drop in prices. People bought -0.2% less gas. Prices exploded in 21 & 22, with 30+% increases in both years. Sales also increased over 30% in both years, but consumers bought 1>2% less. In 23, prices fell -10.6%, but it didn’t help as sales fell -11.4%. People bought 1.0% less. In 2020, consumers began driving a lot less, but they radically increased the amount of home deliveries. We bought -4.7% less gas in 23 than in 19 but in every year, we bought 98>99% of the amount bought the previous year.

Relevant Retail (Total less Restaurants, Auto & Gas Stations) – 2018>19 growth was 3.5%, 97% was real because inflation was only 0.1%. In 2020 they had the only growth, +7.9%, which kept Total Retail positive. Inflation was 1.4% so 81% of the lift was real. In 21, they had a strong increase, but inflation doubled to 2.9%. However, 76% of the growth was still real. In 22, prices exploded to +8.1%. Sales still increased but the lift slowed to 7.9% and real sales turned slightly negative, -0.1%. In 23, inflation plunged to 3.2% but prices were still 16.4% above 2019. The sales increase  fell to 3.5%. This was the same as 18>19 but only 6% was real – cumulative inflation.

Recap– The situation is obviously complex. In 23, all groups had a 28+% increase from 2019 but when you consider inflation, the percentage of their increase that was real peaked at 48% for Relevant Retail. Gas Stations were even really down -4.7%. Relevant Retail has a number of channels, which took many different paths. Let’s look deeper.

Here is an overview of the most Pet Relevant Retail Channels

There is a lot of consistency. 7 of 11 channels had consistent annual growth so they peaked in 2023. Of the other 4 channels, Discount Department Stores & Office, Gift & Souvenir Stores had the same pattern – drops in 2020 & 2023 with sales peaking in 2022. Home Center/Hardware stores had consistent growth until sales dropped in 2023. Sporting Goods Stores peaked in 2021 then fell in 2022. They have essentially plateaued at their 2021 peak. All channels sold more in 2023 than in 2019. The biggest increases came from the Internet, +90.6%, A/O Misc. (includes Pet),+53.7%, and Farm Stores, +53.0%. Now, let’s look at the details.

Relevant Retail, 11 Channels – 19: 8 were actually & really up. 20: Inflation was still low, at 1.4% so the number really & actually up grew to 9; 21: The CPI grew by 2.9% but actual & real sales increased for all 11. 22: Prices grew by 8.1%. 10 had sales increases but only 4 were real and Relevant Retail sales were really down -0.1%. 23: 8 were up and 5 were real. However, the lifts were smaller. The lift, 3.5%, was equal to 2019 but the percentage of real growth fell from 97% to 6%.

Home Ctr/Hardware – 19: The CPI was low at 1.5% but sales fell -2.6%. 20 & 21: Sales took off, by about +13% in both years, even as the CPI grew from 1.8% to 3.5%. 22: Prices jumped up by 10.9%. $ still increased by 6.7% but real sales were -3.7%. 23: Prices grew 7.4% and sales fell -4.2%. Now, only 14% of their 31.1% 19>23 growth is real.

Farm/Garden – 19: Unlike Home Ctrs, they had a small lift, +2.6%. 20>23: The same pattern as Home Ctrs/Hdwe but their 20 & 21 lifts were 33+% larger. Their 22 & 23 lifts were not enough to overcome inflation so real sales fell -3.1% in 22 and -4.5% in 23. However, 42% of their 53% 19>23 growth was real – 3 times better than Home Ctrs.

Supermarkets – 19: Inflation was 0.9% and sales grew 3.4%. 20: The CPI was 3.5% but the $ took off, +10.1%. 21: Inflation stayed at 3.5% but the increase slowed to 3.8%, with only 0.3% real growth. 22: The CPI jumped by 11.4%. Sales were up 8.9% but really down -2.3%. 23: Inflation slowed to 5.0% but the $ increase was only 2.8% and real sales were down -2.2%. Only 8% of their 27.9% 19>23 growth is real.

Drug Stores – 19: The CPI was 0.0% and $ grew 1.7%. 20: The increase quadrupled to 7.0% and prices only grew by 0.5%. 21: Prices deflated -1.5% and sales were +6.6%. 22: The CPI grew to 2.9% and the $ increase slowed to 2.5% so real sales were -0.4%. 23: Inflation grew to 4.2% but $ had their biggest lift, +8.3%. Despite rising inflation, 73% of their 26.5% 19>23 growth is real.

Sporting Goods – 19: The CPI was 1.2% and sales grew 2.2%. 20: Inflation stayed at 1.2% but sales took off, +17.2%. 21: inflation increased over 5 times to 6.7% but the lift increased to 22.3% reaching their 19>23 sales peak. 22: Prices grew 5.2% and sales dropped -1.2%. 23: Prices fell -0.5% but sales only grew 0.1%. They have basically plateaued near the 2021 level but 61% of their 41.8% 19>23 growth is real.

Discount Dept Strs: 19: Prices deflated -0.1% but $ still fell -2.5%. 20: The CPI was only 0.3% but sales still dropped -4.3%. 21: Prices were up 2.4% but their sales recovered, +12.3%. 22: Inflation more than doubled to 5.7% and the $ lift slowed to 1.4%. Real sales were -4.1%. 23: The CPI fell to 2.2% but sales decreased by -1.4%. Their sales are up 7.6% from 2019 but their real sales are down -3.1%.

Clubs & SuperCenters: 19: The CPI was 0.1% and sales grew 2.9%. 20: CPI was 1.6%. Sales grew 5%. 21: CPI increased to 2.8% but sales increased by 8.4%, 5.5% real. 22: Inflation peaked at 7.8%. $ again grew by 8.4% but real growth fell to 0.5%. 23: The CPI slowed to 3.4% but the cumulative impact caused growth to slow to 3.0% and real growth turned negative at -0.4%. Only 34% of their 27.1% 19>23 growth was real.

$/Value Stores: 19: CPI = 0.1%. Also, a 2.9% sales increase. 20: CPI = 1.6%. Sales spiked at +13.0%. 21: CPI = 2.8%. $ growth slowed to 3.7%. Real growth only 0.9%. 22: CPI jumped up to 7.8%. Sales growth increased to 4.3% but real growth was negative, -3.2%. 23: CPI slowed to 3.4% and sales increased by 6.9% so real growth turned positive again at 3.4%. 40% of their 30.6% 19>23 growth was real, a little better than Clubs/SupCtrs.

Office/Gift/Souvenir – 19: CPI = -0.1%. Sales fell -2.1%. 20: CPI = 0.3%. Sales plummeted, -19.2%. 21: CPI = 2.4%, Sales had a strong recovery, +23.6%. 22: CPI jumped to 5.7% and growth slowed to 6.1%. 23: The CPI moved down to 2.2% but sales fell -3.6%. Although their actual sales are up 2.2% from 2019, they are really down -7.9%.

A/O Mscellaneous (22% Pet) – 19: CPI = -0.1% and sales grew 3.4%. 20: CPI = 0.3% and sales increased by 4.8%. 21: CPI increased to 2.4% but sales took off, +22.5%. 22: The CPI jumped to 5.7% and the lift slowed a little to 14.7% so now only 58% was real. 23: The CPI dropped to 2.2% but sales growth slowed to 4.4% and only 48% was real. Their overall 19>23 growth was 53.7% (2nd best) and 72% was real.

Internet/Mail Order – 19: CPI = -0.1%. Sales were +12.7%. 20: CPI = 0.3%. Sales skyrocketed, +35.2%. 21: CPI = 2.4%. Growth slowed but was still +15.4%. 22: CPI increased to 5.7% and sales were +12.2%. Now only 51% of the growth was real. 23: CPI dropped to 2.2% but sales growth slowed to 8.9%, 30% below 2019. They are by far the 19>23 growth leader, +90.6% and 79% of their increase was real.

Recap: The retail journey from 2019>23 was complex, so you have to look deeper than the overall sales to better understand what was happening. The Pandemic and the worst inflation in 40 years were major traumas. Factoring inflation into the data to get the real changes was especially important. You see that different channels took different paths. Retail has largely recovered from the Pandemic, but the price surge recovery is still ongoing.

Retail Channel Monthly $ Update – January Final & February Advance

In February, Commodities inflation vs last year rose from 0.1% in January to 0.3%. Although down from its peak, cumulative inflation still impacts consumer spending. The sales increase rate is lower than in recent years for most channels and even below the inflation rate in a number of cases. A sales increase below inflation indicates a drop in the amount of product sold. The recovery continues but there is still a long road ahead, so we’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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

We will begin with the January Final Report and then go to the Advance Report for February. Our focus is comparing to last year but also 2021 & 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

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

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

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

First, the January Final. All were down from December. However, all but Gas Stations were up vs 23, 21 & 19. Considering inflation, the # of real drops vs last year & 21 (4) were the same as December. Gas Stations are still really down vs 2019 but for the 3rd straight month, Relevant Retail is “really” up vs all years. ($ are Not Seasonally Adjusted)

The January Final is $3.7B less than the Advance report. Restaurants: -$2.6B; Auto: -$0.7B; Gas Stations: +$0.1B; Relevant Retail: -$0.3B. As expected, $ were down for all vs December, but actual sales for all but Gas Stations were positive in all measurements vs 23, 21 & 19. Gas prices fell but Gas Stations sales were down vs 23. There were 5 “real” sales drops, 3 from Gas Stations. The real measurement vs last year for Relevant Retail was positive again at +2.3%. Total Retail also has all positive measurements (actual & real) vs 23, 21 & 19. Restaurants have the biggest increases vs 21 & 19 but Relevant Retail is still the top “real” performer vs 2019. However, only 53% of their growth is real.

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

Overall– All were down from December. vs 23, 6 were both actually and “really” up. Vs 21, 10 were up but only 4 were real increases. Vs 2019, Off/Gift/Souv were actually & really down. Plus, Home Ctr & Hardware were also really down

  • Building Material Stores – The pandemic focus on home has produced sales growth of 23.6% since 2019. Prices for the Bldg/Matl group have inflated 20.5% since 2021 which is having an impact. Both HomeCtr/Hdwe and Farm stores are only actually up vs 21 & 19. However, all real measurements vs 22 & 21 are negative for both and Home Ctr/Hdwe is now really down vs 19. This means that only 2.1% of the overall Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 4.0%, Real: -0.2%; Farm: 6.2%, Real: 1.9%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation has flipped as the Grocery rate is now 60% lower than Drug/Med products. Drug Stores are positive in all measurements and 68% of their 2019>24 growth is real. All actual $ are up for Supermarkets and inflation is slowing but their 24 real sales are still down vs 21. Only 5% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.1%, Real: +0.3%; Drug Stores: +4.9%, Real: +3.4%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down -42.2% from December, but their only other negatives are actual & real vs 21. Prices are still deflating, -1.1% vs 23, a big change from +1.5% in 22>23 and especially the +8.2% in 21>22. The result is that 66.5% of their 50.5% lift since 2019 is real. Their Avg 19>24 Growth Rate is: +8.5%; Real: +6.0%.
  • Gen Mdse Stores – All were down vs December. Actual sales vs 21 & 19 were up for all but only $/Value had a lift vs 23. Real sales for Clubs & Disc Dept Stores were down vs 23 & 21. $/Value Stores were up vs all years. Disc Dept Strs are now really positive vs 19 but only 23% of their growth is real. The other channels average 41% in real growth. Avg 19>24 Growth: SupCtr/Club: 5.3%, Real: 2.2%; $/Value Strs: +6.3%, Real: +3.2%; Disc. Dept. Strs: +2.5%, Real: +0.6%
  • Office, Gift & Souvenir Stores – Actual sales are down -32.5% from December, and they are negative in all measurements but vs 21. Their real sales numbers are all negative including -15.0% vs 2019. Their recovery started late, and their slow progress has stalled since June. Avg Growth Rate: -1.3%, Real: -3.2%
  • Internet/Mail Order – $ are down -20.3% from December but set a new monthly record of $105.0B. All measurements are positive, but their growth is only 63.5% of their average since 2019. However, 83.4% of their 119.7% growth since 2019 is real. Avg Growth: +17.0%, Real: +14.8%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, rose in Sep>Nov, then fell in Dec>Jan. However, all measurements vs 22, 21 & 19 are positive. They are in 2nd place, behind the Internet, in the % increase vs 19 but the leader vs 21. (Only ahead of the Internet by +0.9%). 56% of their 70.4% growth since 2019 is real. Average 19>24 Growth: +11.2%, Real: +9.1%.

Cumulative inflation is becoming more important in Retail. In actual $, 6 channels reported sales increases vs 23 & 10 vs 21. When you factor in inflation, the number with “real” growth is still 6 vs 23 but only 4 vs 21. Inflation’s is slowing but it is still lowering sales increases. The January  lift vs 23 was only 18% of the 22>23 increase. The impact is also visible in specific retail channels. The commodities CPI increased slightly in February. Let’s look for any impact on Retail $ales.

February sales vs January grew for all big groups but Relevant Retail – a big surprise. A Jan>Feb Total Retail lift has only happened once in the last 30 years -2016 (+0.7%). That was also the only year that February wasn’t on the bottom in Retail Sales. All actual $ measurements are again positive vs 23, 21 & 19 for all big groups but Gas Stations, and the lifts vs 2023 have improved. Inflation is still a big factor. The national CPI grew from 3.1% to 3.2% but is still 18.0% vs 21. The all commodities rate, which is the best pricing measure for Retail, grew from 0.1% to 0.3% and is 17.4% vs 21. Here is some “real” good news. In February only 1 measurement was “really” down vs 22 & 21 and it came from Gas Stations. Relevant Retail’s real monthly sales vs last year have now been positive for 8 straight months, but the best news is that Relevant Retail is positive in all measurements vs last year, 2021 and 2019 for the 4th consecutive month.

Overall – Inflation Reality – For Total Retail, inflation grew but all real sales are again positive. For Restaurants, inflation remains high, +4.5% but they are really positive vs 22 & 21. Gas prices are still deflating but that group is in turmoil. Auto prices are down but still up 19.6% vs 21 which significantly slowed their real sales. Inflation is down to 0.1% for Relevant Retail and all of their real sales are positive for the 4th  straight month. They continue to make slow progress.

Total Retail – Since June 20, every month but April 23 has set a monthly sales record. In 2023 Sales were on a roller coaster. Up in Jul>Aug, down in Sept, up in Oct>Dec (new record), down in Jan 24, then unexpectedly up in Feb. Inflation grew but is only 0.3%. YOY sales growth is still low. Sales are up 3.4% Ytd vs last year, but this is only 46% of their avg 19>24 growth. All real sales are positive again but only 41% of the 19>24 growth is real. YOY inflation in Total Retail has significantly slowed but we still see its cumulative impact. Growth: 23>24: 3.4%; Avg 19>24: +7.4%, Real: +3.3%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $96B in December 23 and exceeding $1T for the 1st time. They have the biggest increases vs 23, 21 & 19 and all real sales are positive. Inflation slowed to 4.5% from 5.0% last month but is still +20.6% vs 21 and +25.6% vs 19. 40.4% of their 52.4% growth since 19 is real and they fell to 3rd in performance behind Relevant & Total. Recovery started late but inflation started early. Growth: 6.3%; Avg 19>24:+8.8%, Real: +3.9%. They just account for 13.4% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – They actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their Y/E real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 was a true rollercoaster but the $ grew in December pushing them to a new record, $1.595T. $ fell in January but surprisingly grew in February. All numbers are positive. Prices vs 23 are -0.3%. Only 29% of their 19>24 growth is real. Growth: 3.1%; Avg 19>24: +6.5%, Real: +2.0%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In August they turned up to -3.7%. In Sep they were +2.7% but then began deflating and are -4.2% in Feb. Pricing is a big factor in the actual $ drop vs 23 but only Ytd real sales vs 21 & 19 are negative.  Growth: -4.3%; Avg 19>24: +5.5%, Real: -1.1%. Their data shows the cumulative impact of inflation and demonstrates how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, sales continued on the roller coaster. A December lift set a new monthly record of $494.7B and annual record of $4.997T. Sales fell in January and February which is normal for all years but 2024. The -1.6% drop is much better than the -4.4% average since 2019. However, the big news is that all real sales vs last year, 21 & 19 are positive for a 4th consecutive month. 54% of their 44.5% 19>24 growth is real – #1 in performance. Growth: 3.9%; Avg 19>24: +7.6%, Real: +4.4%. This is where America shops. They finished 2023 and now have started up 2024 with all positive sales vs last year, 21 & 19. This is great news!

Inflation is still low, but the cumulative impact is still there. Sales increases are still small, but the Jan>Feb lift and the fact that all Non-Gas Station real sales numbers vs 22 & 21 are still positive is a good sign. Restaurants are still doing well, and Auto is improving. Inflation/Deflation has caused turmoil in Gas Stations’ sales. The biggest positive is from Relevant Retail. All sales measurements are again positive. This means that consumers not only spent more $ in 2023 and in Jan & Feb 24 vs last year, 21 & 19, they also bought more product. The turnaround continues to gain ground.

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

  • Relevant Retail: Growth: +3.9%; Avg: +7.6%, Real: +4.4%. 6 were up from Jan. Vs Feb 23: 8 were up, Real: 10. Vs Feb 21: 10 were up, Real: 8. Vs 19: Only Dept Stores were actually & really down. Furnishing stores were also “really” down.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are up from January. Their actual & real $ are only up vs Feb 23 & 21. All Ytd numbers are actually and really down, even vs 2019. Growth: -2.1%; Avg 19>24: +0.6%, Real: -1.3%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are up from January. In fact, both actual and real sales are positive in all measurements. However, only 44% of their 33.6% 19>24 lift is real – inflation’s impact. Note: Growth exceeds Avg. Growth: 3.1%; Avg: +2.8%, Real: +2.5%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Actual $ are down from January but up monthly and Ytd vs 22, 21 & 19. However, inflation hit them hard. Real $ are down vs 21 and only 14% of the growth since 2019 is real. Growth: 2.7%; Avg 19>24: +5.7%, Real: +0.9%.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are down from Jan but positive in all other measurements, actual & real. Inflation has been relatively low so 67% of their 27.4% growth from 2019 is real. Note: Their growth is above the 19>24 avg. Growth: 5.7%; Avg 19>24: +5.0%, Real: +3.4%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales are up 12.8% from January and positive in all comparisons, actual & real vs 22, 21 & 19. Plus, 74% of their 19>24 growth is real. Growth: 2.4%; Avg 19>24: +3.9%, Real:+3.0%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were high in 2022. Sales are up from January but negative in all other measurements but actual vs Feb 21 & 2019. Even their 19>24 real growth is negative. Growth: -9.2%; Avg 19>24: +2.3%, Real: -0.4%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are down from January, but they may have “turned it around”. Sales are now positive in all measurements. Note: Their growth also exceeds the average. Growth: +3.3%; Avg 19>24: +0.9%, Real: +3.5%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices are now deflating, and sales are up from January but they are only positive vs 21 & 19. Prices are deflating but still high, 19.7% above 21. Real sales are negative for all but vs Feb 23 & 2019. Also, just 24% of their 19>24 sales growth is real. Growth: -4.2%; Avg 19>24: +4.3%, Real: +1.5%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. Actual sales are down from January and vs 23. However, due in part to recent deflation, real sales are positive in all measurements. Their inflation rate has been lower than most groups so 71% of their 29.5% growth since 2019 is real. Growth: -1.0%; Avg 19>24: +5.3%, Real: +3.9%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are up vs January and have returned to being positive in all measurements – both actual & real. They are still 2nd in increase size vs 19 and moved back up to 2nd from 3rd vs 21. 73% of their 52.3% 19>24 growth is real. Growth: +4.1%; Avg 19>24: +8.8%, Real: 6.6%.
  • NonStore Retailers – 90% of their $ comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 22/23 but is back to double digits. $ales are down from January but up in all other measurements. 81.3% of their 105.8% 2019>24 growth is real. Growth: 10.0%; Avg: +15.5%, Real: +13.2%

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 and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its peak in June 2022, which has helped the Retail Situation. Surprisingly, Sales grew from January for all but Relevant Retail. Their drop was driven by NonStore, Grocery, Health/Drug & Sporting Gds. Inflation is slowing in most channels and even deflating in some. However, we are still seeing the impact of high cumulative inflation in some channels. Only a few channels are doing well. The new problem is that the YOY sales increase rate for almost all channels has markedly slowed. In February, only SupCtr/Club/$, Health/Drug & Electronics had a Ytd lift above their 19>24 Avg. This is bad, but better than January, when there was only 1. Some great news is that Relevant Retail has been positive in all measurements for 4 straight months. However, in February, 5 of 11 channels were really down vs 23. The slow turnaround continues, and we are making progress, but we still have a long way to go for a full recovery.

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

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

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

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

 

Retail Channel Monthly $ Update – November Final & December Advance

In December, Commodities prices inflated 0.8% vs 2022, after deflating in November. Although down from its peak, cumulative inflation still impacts consumer spending. The sales increase rate is lower than the inflation rate in a number of channels, which indicates a drop in the amount of product sold. The recovery continues but there is still a long road ahead, so we’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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

We will begin with the November Final Report and then go to the Advance Report for December. Our focus is comparing to last year but also 2021 & 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

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

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

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019. (Ytd numbers for Dec are actually the Yr-End, (Y/E) totals)
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the November Final. Only Relevant & Total Retail were up from October. However, all but Gas Stations were up vs 22, 21 & 19. Considering inflation, the # of real drops vs 22 & 21 (4) were down from (6) in October. Gas Stations are still really down vs 2019 but for the 1st time in 2023, Relevant Retail is “really” up vs all years. ($ are Not Seasonally Adjusted)

The November Final is $1.3B less than the Advance report. Restaurants: -$0.3B; Auto: +$0.4B; Gas Stations: -$0.5B; Relevant Retail: -$0.7B. $ were only up vs October for Relevant & Total but actual sales for all but Gas Stations were positive in all measurements vs 22, 21 & 19. Gas prices fell but Gas Stations sales were down again monthly & YTD vs 22. There were 5 “real” sales drops, 4 from Gas Stations. The YTD real measurement vs 22 for Relevant Retail turned positive at +0.1%. They joined Total Retail and Restaurants with all positive measurements (actual & real) vs 22, 21 & 19. They are still the top “real” performer vs 2019 but only about half (48%) of their growth is real.

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

Overall– 7 were up from October. vs 22, 7 were up vs Nov and 8 YTD. 5 were “really” up monthly & Ytd. Vs 21, 7 were up monthly & 10 Ytd, but only 6 monthly & 3 Ytd were real. Vs 2019, Off/Gift/Souv & Disc Dept Strs were really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 34.4% since 2019. Prices for the Bldg/Matl group have inflated 13.1% since 2021 which is having an impact. HomeCtr/Hdwe stores are only actually up Ytd vs 21 & 19, but Farm Stores are up for all. However, Farm Stores vs Nov 21 is the only real positive number vs 22 & 21 for either channel. Importantly, only 20.1% of their 19>23 lift was real. It was only this high because most of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 7.1%, Real: 1.1%; Farm: 11.4%, Real: 5.2%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation has flipped as the Grocery rate is now 66% lower than Drug/Med products. Drug Stores are positive in all measurements and 73% of their growth since 2019 is real. All actual $ are up for Supermarkets but their 23 real sales are down vs 22 & 21 and just slightly positive vs 2019. Only 7% is real growth. Avg 19>23 Growth: Supermarkets: +6.3%, Real: +0.5%; Drug Stores: +6.0%, Real: +4.5%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up +10.4% from October. Their only other positives are YTD vs 22 & 19. Prices are still deflating, -1.8% and YTD, -0.3%, a big change from +5.6% in 21>22 and +6.5% in 20>21. The result is that 61% of their 42.6% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.3%; Real: +5.9%.
  • Gen Mdse Stores – All were up vs October. Actual sales vs 22, 21 & 19 were up for Clubs & $ stores but Disc Dept Stores were only up YTD vs 21 & 19. In real sales Clubs were down Ytd vs 22 & 21. $/Value Stores were only down Ytd vs 21. Disc Dept Strs were down for all, even vs 2019, -2.0%. The other channels average 37% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.2%, Real: 2.3%; $/Value Strs: +6.9%, Real: +2.9%; Disc. Dept. Strs: +2.1%, Real: -0.5%
  • Office, Gift & Souvenir Stores – Actual sales are down from October (-34.3%) and in all measurements but YTD vs 21 & 19. Their real sales numbers are all negative including -7.2% Ytd vs 2019. Their recovery started late, and their slow progress has stalled since June. Avg Growth Rate: +0.8%, Real: -1.8%
  • Internet/Mail Order – Sales are up 16.5% from October and set a new monthly record of $124B. All measurements are positive, but their Ytd growth is only 50% of their average since 2019. However, 79.5% of their 94.6% growth since 2019 is real. Avg Growth: +18.1%, Real: +15.0%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, then rose in Sep>Nov. All measurements are positive. They are in 2nd place in the % increase vs 21 & 19, trailing only the internet, and 72% of their 54.2% growth since 2019 is real. Average 19>23 Growth: +11.4%, Real: +8.5%. .

Inflation remains an important factor in Retail. In actual $, 7 channels reported monthly sales increases vs 22 & 21. When you factor in inflation, the number with “real” growth drops to 5 vs 22 and 6 vs 2021. Inflation’s impact is slowing but it is still lowering sales increases. The November lift vs 2022 was still 20% below Jan/Feb. The impact is also visible in specific retail channels. The commodities CPI inflated in December. Let’s look for any impact on Retail $ales.

In November, sales vs last month were down in Auto, Restaurants, Gas Stations & 4 small channels. December was better as only Gas stations & 2 small channels had a sales decrease from November. A Nov>Dec lift in Total Retail has happened every year since 1992. The average increase was 15.4% so the 8.3% lift in 2023 was about half of the average. All actual $ measurements are again positive vs 22, 21 & 19 for all big groups but Gas Stations, but the lifts vs 2022 are slightly smaller than in November. Inflation is still a big factor. The national CPI rose from 3.1% to 3.4% and the all commodities rate, which is the best pricing measure for Retail, rose from -0.05% to 0.8%. There is some significant “real” good news. The big groups have 20 “real” sales measurements vs 22 & 21. In December, again only 4 were negative and 3 of those came from Gas Stations. Relevant Retail’s real monthly sales vs 22 have now been positive for 6 straight months, but the best news is that Relevant Retail is positive in all measurements for the 2nd consecutive month.

Overall – Inflation Reality – For Total Retail, prices inflated, but all real sales are again positive. For Restaurants, inflation remains high, +5.2% but they are still really positive vs 22 & 21. Gas prices are deflating but that group is in turmoil. Auto prices are down Y/E vs 22 but up 9.9% Y/E vs 21 which pushed their real sales down. Inflation is 0.5% for Relevant Retail and all of their monthly & Y/E real sales are positive for the 2nd straight month. They continue to make slow progress.

Total Retail – Since June 20, every month but April 23 has set a monthly sales record. In 2023 Sales have been on a roller coaster. Up in Jul>Aug, down in Sept, then up in Oct>Dec to new record highs of $771.4B & $8.333T. Prices inflated 0.8% and sales growth is still low. Sales are up 4.0% monthly vs last year & 3.2% Y/E but the Y/E is only 41% of their avg 19>23 growth. All real sales are positive again but only 34% of the 19>23 growth is real. Inflation in Total Retail has radically slowed vs 2022 but we still see its cumulative impact. Growth: 22>23: 3.2%; Avg 19>23: +7.8%, Real: +2.9%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They have the biggest increases vs 22, 21 & 19 and all real sales are positive. Inflation slowed to 5.2% from 5.3% last month but is still +13.8% vs 21 and +22.6% vs 19. 36.1% of their 40.7% growth since 19 is real but they remain 2nd in performance behind Relevant Rtl. Recovery started late but inflation started early. Growth: 22>23: 11.3%; Avg 19>23: +8.9%, Real: +3.5%. They just account for 13.0% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – They actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their Y/E real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 was a true rollercoaster but the $ grew in December pushing them to a new record, $1.595T. Only Y/E real $ vs 21 are down. Prices vs 22 are -0.9% monthly and -1.5% Y/E. Only 5% of their 19>23 growth is real. Growth: 22>23: 4.2%; Avg 19>23: +6.6%, Real: +0.4%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb, strongly dropped in Mar>Jul to -20.2%. In August they turned up to -3.7%. In Sep they were +2.7% but then began deflating and are -2.3% in Dec. Pricing is a big factor in the actual sales drops vs 22 and only real sales vs Dec 21 are positive.  Growth: 22>23:  -11.5%; Avg 19>23: +6.4%, Real: -1.2%. The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, sales continued on the roller coaster. A December lift set a new monthly record of $494.7B and annual record of $4.997T so actual sales are again up vs 22, 21 & 19. However, the big news is that all real sales vs 22, 21 & 19 are positive for a second consecutive month. 48% of their 36.9% 19>23 growth is real – #1 in performance. Growth: 22>23: 3.5%; Avg 19>23: +8.2%, Real: +4.1%. This is where America shops. Another month and now a full year of all positive sales vs 22, 21 & 19 is a great news.

Inflation is still low, but the cumulative impact is still there. Sales increases are still small, but the fact that 94% of all Non-Gas Station real sales numbers vs 22 & 21 are still positive is a good sign. Restaurants are still doing well, and Auto is improving. Inflation/Deflation has caused turmoil in Gas Stations’ sales. The biggest positive is from Relevant Retail. All sales measurements are positive again. This means that consumers not only spent more $ monthly in Nov, Dec & Annually in 2023 vs 22, 21 & 19, they also bought more product. The turnaround continues to gain ground.

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

  • Relevant Retail: Growth: 22>23: 3.5%; Avg 19>23: +8.2%, Real: +4.1%. 9 were up from Nov. Vs 22: 8 were up monthly & Y/E, Real: 7 monthly, 6 Y/E. Vs 21: 8 monthly & Y/E, Real: 7 Monthly, 5 Y/E. Vs 19: Furnishing & Dept Strs had the only negatives.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are up 35.2% from November but down for all comparisons vs 22, 21 & even 19. Their real sales are also down in all measurements. Growth: 22>23: -2.7%; Avg 19>23: -0.4%, Real: -2.9%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are up from November and in all other measurements, both actual and real. However, only 35% of their 27.7% 19>23 lift is real – the impact of inflation. Growth: 22>23: 3.6%; Avg 19>23: +6.3%, Real: +2.4%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are up from November and in all measurements vs 22, 21 & 19. However, inflation hit them hard. Real $ are down for all but Y/E vs 2019 and only 6.5% of the growth since 2019 is real. Growth: 22>23: 2.5%; Avg 19>23: +6.3%, Real: +0.5%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are up from November and positive in all other measurements but real vs December 21. Inflation has been relatively low so 73% of their 26.2% growth from 2019 is real. Growth: 22>23: 8.5%; Avg 19>23: +6.0%, Real: +4.4%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual $ales are up 41.5% from November and in all comparisons vs 22, 21 & 19. Real sales are down Y/E vs 22 & 21, but 65% of their 19>23 growth is real. Growth: 22>23: 1.6%; Avg 19>23: +3.9%, Real:+2.6%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were high in 2022. Sales are down from November and negative in all other measurements but actual Y/E 2023 vs 2019. Their real sales are even down -4.4% vs 2019. Growth: 22>23: -5.4%; Avg 19>23: +2.6%, Real: -1.1%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are up 16% from November and are now only down Y/E vs 21. Consistent deflation has caused real sales to be positive in all measurements. Growth: 22>23: 0.6%; Avg 19>23: +0.5%, Real: +2.8%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Inflation has slowed to 0.9%. Sales are down from November, and they are only positive Y/E vs 21 & 19. They have the highest Y/E 22>23 Inflation rate of any channel so real sales are negative in all but Y/E vs 2019. Also, just 20% of their 19>23 sales growth is real. Growth: 22>23: -3.0%; Avg 19>23: +7.6%, Real: +1.7%.
  • 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. Actual $ales are up 31.9% from November and positive for all measurements. Real sales are only down Y/E vs 21. Prices deflated again and their inflation rate has been lower than most groups so 67.8% of their 29.8% growth since 2019 is real. Growth: 22>23: 0.4%; Avg 19>23 +6.7%, Real: +4.7%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are up vs November and positive in all other measurements – actual & real. They are 2nd to NonStore in increases vs 21 & 19. 66% of their 40.4% 19>23 growth and 46% of their 16.0% 21>23 growth is real. Growth: 22>23: 3.2%; Avg 19>23: +8.9%, Real: 6.1%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ales are up from November and in all other measurements. 77.8% of their 83.0% growth since 2019 is real. Growth: 22>23: 8.0%; Avg 19>23: +16.3%, Real: +13.3%.

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its peak in June 2022, which has helped the Retail Situation. Sales were up from November for Total & Relevant Retail & most channels. Inflation is slowing in many channels and even deflating in a few. However, some channels like Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling. Only a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed. The evidence for this is now in. Only Restaurants, Health/Drug & Electronic/Appliances had a 22>23 change above their 19>23 average lift. Most of the other channels had an increase that was less than half of their 19>23 average. Some great news is that Relevant Retail has been positive in all measurement for 2 straight months. However, 5 of 11 channels were really down Y/E vs 22. The turnaround is a little more widespread, but 2023 was a mixed bag of pluses and minuses. We are making progress but still have a long way to go for a full recovery.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes from 2021 to 2023 to show cumulative inflation.

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

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

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

Retail Channel Monthly $ Update – October Final & November Advance

In November, Commodities prices actually deflated vs 2022. Although down from its peak, cumulative inflation still impacts consumer spending. The sales increase rate is lower than the inflation rate in a number of channels, which indicates a drop in the amount of product sold. The recovery continues but there is still a long road ahead, so we’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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

We will begin with the October Final Report and then go to the Advance Report for November. Our focus is comparing to last year but also 2021 & 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

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

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

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the October Final. All but Auto were up from September and all but Gas Stations were up vs 22, 21 & 19. When you consider inflation, the # of real drops vs 22 & 21 (6) was the same as September. Gas Stations are still really down vs 2019. A significant fact to note is that Relevant Retail is again “really” up monthly vs 22. ($ are Actual, Not Seasonally Adjusted)

The October Final is $1.8B less than the Advance. Specifically, Restaurants: No Chge; Auto: -$0.2B; Gas Stations: -$0.4B; Relevant Retail: -$1.3B. $ were up vs September for all but Auto and actual sales for all but Gas Stations were positive in all measurements vs 22, 21 & 19. Gas prices fell but Gas Stations sales were down again monthly & YTD vs 22. There were 7 “real” sales drops, 5 from Gas Stations. Restaurants and now Total Retail are the only groups with all positives. Monthly real sales for Relevant Retail vs 22 are up again but have been down in 15 of the last 20 months. Their YTD real measurement vs 22 is still negative. They are the top “real” performer vs 2019 but only 48% of their growth is real.

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

Overall– 10 were up from September, but vs 22, only 5 were up vs Oct and 8 YTD. 4 were “really” up monthly & 5 Ytd. Vs 21, 9 had increases but only 4 monthly & 3 Ytd were real. Vs 2019, Office/Gift/Souvenir & Discount Department Stores were really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 34.3% since 2019. Prices for the Bldg/Matl group have inflated 14.7% since 2021 which is having an impact. HomeCtr/Hdwe stores are down monthly & Ytd vs 22 but up vs 21 &19. Farm Stores are only down vs October 22. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 20.1% of their 19>23 lift was real. It was only this high because most of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 7.0%, Real: 1.1%; Farm: 11.4%, Real: 5.2%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation has flipped as the Grocery rate is now 55% lower than Drug/Med products. Drug Stores are positive in all measurements and 73% of their growth since 2019 is real. Except vs Oct 22, the $ are all up for Supermarkets but their 23 real sales are down vs 22 & 21 and just slightly positive vs 2019. Only 7% is real growth. Avg 19>23 Growth: Supermarkets: +6.3%, Real: +0.5%; Drug Stores: +5.9%, 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 down -2.3% from September. Their only positives are YTD vs 22, monthly vs 21 and YTD vs 19. Prices are still deflating, -1.2% and YTD, -0.1%, a big change from +5.6% in 21>22 and +6.5% in 20>21. The result is that 60% of their 42.6% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.3%; Real: +5.8%.
  • Gen Mdse Stores – All were up vs September. Actual sales vs 22, 21 & 19 were up for Clubs & $ stores but Disc Dept Stores were only up YTD vs 21 & 19. In real sales SupCtr/Clubs were down vs 22 & 21. $/Value Stores were only down YTD vs 21. Disc Dept Stores were down in all measurements, even vs 2019, -1.2%. The other channels average 35% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.3%, Real: 2.4%; $/Value Strs: +6.8%, Real: +2.8%; Disc. Dept. Strs: +2.4%, Real: -0.3%
  • Office, Gift & Souvenir Stores – Actual sales are up 20.2% from September but down in all measurements but YTD vs 21 & 19. Their real sales numbers are all negative including -6.1% Ytd vs 2019. Their recovery started late, and their slow progress stalled in Jun>Sep. However, it may have restarted in October. Avg Growth Rate: +1.1%, Real: -1.6%
  • Internet/Mail Order – Sales are up 8.2% from September and again above $100B. All measurements are positive, but their growth is only 60% of their average since 2019. However, 79% of their 94.5% growth since 2019 is real. Avg Growth: +18.1%, Real: +15.0%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, then rose in Sep/Oct. All measurements are positive. They remain in 2nd place in the % increase vs 2021 but 71% of their 54.5% growth since 2019 is real. Average 19>23 Growth: +11.5%, Real: +8.6%. They also moved back up to 2nd place in growth since 2019, only trailing the Internet.

Inflation remains an important factor in Retail. In actual $, 5 channels reported increases in sales vs 2022 and 9 vs 2021. When you factor in inflation, the number with “real” growth drops to 4 vs 2022 and vs 2021. Inflation’s impact may be slowing but it is still lowering sales increases. The October lift vs 2022 was less than 50% of Jan/Feb. The impact is also visible in specific retail channels. The commodities CPI deflated in November. Let’s look for any impact on Retail $ales.

In October, all but Auto & 3 small channels were up vs last month. November had  a similar pattern. Again, 3 small channels were down but in addition to Auto, sales in Gas Stations & Restaurants also fell. An Oct>Nov lift in Total Retail has happened in 75% of the years since 1992. The average increase was 2.2% so the 2.0% lift in 2023 was slightly below average. All actual $ measurements are again positive vs 22, 21 & 19 for all big groups but Gas Stations. Plus, the lifts vs 2022 are slightly larger than in October. Inflation is still a big factor. However, the national CPI slowed from 3.2% to 3.1% and the all commodities rate, which is the best pricing measure for Retail, fell from 0.4% to -0.05%. There is some significant “real” good news. The big groups have 20 “real” sales measurements vs 22 & 21. In November, only 4 were negative and 3 of those came from Gas Stations. Relevant Retail’s real monthly sales vs 22 have now been positive for 5 straight months, but the biggest news is that Relevant Retail is positive in all measurements for the 1st time in 2023.

Overall – Inflation Reality – For Total Retail, prices deflated, and all real sales are again positive. For Restaurants, inflation remains high, +5.3% but they are still really positive vs 22 & 21. Gas prices fell but that group is in true turmoil. Auto prices are down vs 22 but up 10.9% Ytd vs 21 which pushed their real sales down. Inflation is 0.7% for Relevant Retail and all of their monthly & ytd real sales are positive for the 1st time in 2023. They continue to make slow progress.

Total Retail – Since June 2020, every month but April 23 has set a monthly sales record. December 22 $ were $748.9B, a new all-time record. Sales have been on a rollercoaster. Up in July & Aug, down in September, then up in October & November. Prices deflated -0.05% but sales growth is still low. Sales are up 4.3% vs last year. That’s only 54% of their average 19>23 growth. All real sales measurements are positive again but only 35% of the 19>23 growth is real. Inflation in Total Retail has radically slowed vs 2022 but we still see its cumulative impact. Avg 2019>23 Growth: +7.9%, Real: +2.9%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They have the biggest increases vs 22, 21 & 19 and all real sales are positive. Inflation slowed to 5.3% from 5.4% last month but is still +14.1% vs 21 and +22.4% vs 19. 36.7% of their 40.6% growth since 19 is real but they remain 2nd in performance behind Relevant Retail. Recovery started late but inflation started early. Avg 2019>23 Growth: +8.9%, Real: +3.5%. They just account for 13.1% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – They actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their real 22 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 is a true rollercoaster. $ grew in Jan>Feb, fell Mar>Apr, grew in May, fell Jun>Jul, grew in Aug, fell in Sep, grew in Oct, then fell in Nov. Only Ytd real $ vs 21 are down. Prices vs 22 are -0.9% monthly & -1.5% Ytd. Only 5% of 19>23 growth is real. Avg 2019>23 Growth: +6.6%, Real: +0.4%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb, strongly dropped in Mar>Jul to -20.2%. In August they turned up to -3.7%. In Sep they were +2.7% but then fell to -9.2% in Oct/Nov. Pricing is a big factor in the actual sales drops vs 22 and only real sales vs Nov 21 are positive.  Avg 2019>23 Growth: +6.6%, Real: -1.2%. The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, Jan & Feb had normal $ drops then grew in March, starting another roller coaster. Sales fell in Jun>Jul, turned up in Aug, fell in Sep, then grew in Oct/Nov. Actual sales are again up vs 22, 21 & 19. However, the big news is that all sales comparisons – both actual & real are positive for the 1st time in 2023. 48% of their 37.6% 19>23 growth is real – #1 in performance. Avg 2019>23 Growth is: +8.3%, Real: +4.2%. This is where America shops. A month of all positive sales vs 22, 21 & 19 is a great news.

Inflation is still low but the cumulative impact is still there. Sales increases are still small, but the fact that 94% of all Non-Gas Station real sales numbers vs 22 & 21 are still positive is a good sign. Restaurants are still doing well, and Auto is improving. Inflation/Deflation has caused turmoil in Gas Stations’ sales. The biggest positive is from Relevant Retail. For the 1st time in 2023, all sales measurements are positive. This means that as of November, consumers not only spent more $ monthly & Ytd in 2023 vs 22, 21 & 19, they bought more product. The turnaround continues to gain ground.

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

  • Relevant Retail: Avg Growth Rate: +8.3%, Real: +4.2%. 8 of 11 were up from October and vs November 22 & 21. However, only 6 had a “real” increase vs 22 & 4 vs 21. Inflation continues to slow sales increases.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are up 19% from October but down for all comparisons vs 22, 21 & even 19. Their real sales are also down in all measurements. Avg 2019>23 Growth: -0.1%, Real: -2.7%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are up from October and in all other measurements. Their real sales are down Ytd vs 22 & 21. Only 35% of their 27.7% 19>23 lift is real – the impact of inflation. Avg Growth: +6.3%, Real: +2.4%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are up from October and in all measurements vs 22, 21 & 19. However, inflation hit them hard. Real sales are down for all but Ytd vs 2019 and only 6% of the growth since 2019 is real. Avg Growth: +6.2%, Real: +0.4%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are up from October and positive in all other measurements, actual and real vs 22, 21 & 19. Inflation has been relatively low so 73% of their 26.2% growth from 2019 is real. Avg 2019>23 Growth: +6.0%, Real: +4.4%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual $ales are up from October and monthly & Ytd vs 22, 21 &19. Real sales are down monthly and Ytd vs 21 & Ytd vs 22, but 64% of their 19>23 growth is real. Avg 2019>23 Growth: +3.8%, Real:+2.5%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were high in 2022. Sales are up from October but negative in all other measurements but actual Ytd vs 2019. Their real sales are even down -4.1% vs 2019. Avg 2019>23 Growth: +2.8%, Real: -1.0%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are up from October and now only down Ytd vs 22 & 21. Consistent deflation has caused real sales to be positive in all measurements. Avg 2019>23 Growth: +0.6%, Real: +2.9%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Inflation has slowed to 2.8%. Sales are down from October, and they are again all negative vs 2022. They have the highest Ytd 22>23 Inflation rate of any channel so real sales are negative in all but Ytd vs 2019. Also, just 20% of their sales growth since 2019 is real. Avg 2019>23 Growth is: +7.7%, Real: +1.7%.
  • 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. Actual $ales are up from October and positive for all but vs Nov 22 & 21. Real sales are only down monthly & YTD vs 21. Prices deflated again and their inflation rate has been lower than most groups so 66.8% of their 29.5% growth since 2019 is real. Avg 2019>23 Growth: +6.7%, Real: +4.6%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are down vs October but positive in all other measurements – actual & real. They are 2nd to NonStore in increases vs 21 & 19. 65% of their 40.5% 19>23 growth and 45% of their 16.5% 21>23 growth is real. Their Avg 19>23 Growth is: 8.9%, Real: 6.0%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ales are up from October and in all other measurements. 77.9% of their 86.6% growth since 2019 is real. Their Avg Growth: +16.9%, Real: +13.8%.

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its peak in June 2022, which has helped the Retail Situation. Sales were up from October for Total Retail, Relevant Retail & most channels. Inflation is slowing in many channels and even deflating in a few. However, some channels like Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling. Only a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed and is even below the lower inflation rate. Real monthly sales for Relevant Retail have been positive vs 22 for 6 of the last 7 months but are still negative for 5 of 11 channels. The big news is that Relevant Retail is positive in all measurements for the 1st time in 2023. The turnaround is a little more widespread, but November was again a mixed bag of pluses and minuses. We are definitely making progress but still have a long way to go for a full recovery.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes from 2021 to 2023 to show cumulative inflation.

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

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

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

Retail Channel Monthly $ Update – September Final & October Advance

In October, Commodities inflation fell from 1.4% to 0.4%. Although down from its peak, inflation still impacts consumer spending. The sales increase rate is lower than the inflation rate in a number of channels, which indicates a drop in the amount of product sold. A recovery may have started but there is still a long road ahead, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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

We will begin with the September Final Report and then go to the Advance Report for October. Our focus is comparing to last year but also 2021 & 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

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

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

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the September Final. All were down from August but all, but Gas Stations were up vs 22, 21 & 19. When you consider inflation, the # of real drops vs 22 & 21 (6) was down from August (8). Gas Stations are still really down vs 2019. A significant fact to note is that Relevant Retail is again “really” up monthly vs 22. (All $ are Not Seasonally Adjusted)

The September Final is $2.3B more than the Advance. Specifically, Restaurants: +$0.9B; Auto: +$0.5B; Gas Stations: +$0.1B; Relevant Retail: +$0.7B. $ were down vs August for all, but actual sales for all but Gas Stations were positive in all measurements vs 22, 21 & 19. Gas prices turned up and Gas Stations sales dropped again monthly & YTD vs 22. There were 7 “real” sales drops, 5 from Gas Stations. Restaurants and now Total Retail are the only groups with all positives. Monthly real sales for Relevant Retail vs 22 are up again but have been down in 15 of the last 19 months. Their YTD real measurement vs 22 is still negative. They are the top “real” performer vs 2019 but only 48% of their growth is real.

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

Overall– Only 1 was up from August, but vs 22, 7 were up vs Sep. and 8 YTD. 5 were “really” up monthly & 4 Ytd. Vs 2021, 10 had increases but only 6 monthly & 3 Ytd were real. Vs 2019, Off/Gift/Souv & Disc Dept Strs were really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 34.9% since 2019. Prices for the Bldg/Matl group have inflated 19.6% since 2021 which is having an impact. HomeCtr/Hdwe stores are down monthly & Ytd vs 22 but up vs 21 &19. Farm Stores are up in all measurements. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 20.6% of their 19>23 lift was real. It was only this high because most of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 7.1%, Real: 1.2%; Farm: 11.6%, Real: 5.4%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation has flipped as the Grocery rate is now 43% lower than Drug/Med products. Drug Stores are positive in all measurements and 73% of their growth since 2019 is real. While the $ are all up for Supermarkets, their 23 real sales are down vs 22 & 21 and just slightly positive vs 2019. Only 7% is real growth. Avg 19>23 Growth: Supermarkets: +6.3%, Real: +0.5%; Drug Stores: +5.8%, 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 down -16.9% from August. Their only positives are YTD vs 22, monthly vs 21 and YTD vs 19. Prices are still deflating, -0.1% and YTD they’re flat, a big change from +5.4% in 21>22 and +6.5% in 20>21. The result is that 60% of their 42.8% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.3%; Real: +5.8%.
  • Gen Mdse Stores – All were down vs August but actual sales vs 22, 21 & 19 were up for all but Disc Dept Stores vs 22. In real sales Clubs were only down YTD vs 22 & 21. $/Value Stores were only down YTD vs 21. Disc Dept Stores are the worst performer and again are really down vs 2019, -1.0%. The other channels average 36% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.3%, Real: 2.4%; $/Value Strs: +6.8%, Real: +2.8%; Disc. Dept.: +2.4%, Real: -0.25%
  • Office, Gift & Souvenir Stores – Actual sales are down from August and in all measurements but YTD vs 21 & 19. Their real sales numbers are all negative including -6.5% Ytd vs 2019. Their recovery started late, and their slow progress has stalled in Jun>Sep. Avg Growth Rate: +1.0%, Real: -1.7%
  • Internet/Mail Order – Sales are down from August and fell below $100B, but still set a record for the month. All measurements are positive, but their growth is only 47% of their average since 2019. However, 79% of their 95% growth since 2019 is real. Avg Growth: +18.2%, Real: +15.1%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, then rose in Sep. All measurements but real YTD vs 2022 are positive. They fell to 2nd place in the % increase vs 2021 but 72% of their 54.8% growth since 2019 is real. Average 19>23 Growth: +11.5%, Real: +8.6%. They also dropped from 2nd to 3rd in growth since 2019, behind the Internet & Farm Stores.

Inflation remains an important factor in Retail. In actual $, 7 channels reported increases in sales vs 2022 and 10 vs 2021. When you factor in inflation, the number with “real” growth drops to 5 vs 2022 and 6 vs 2021. Inflation’s impact may be slowing but it is still lowering sales increases. The September lift vs 2022 was less than 50% of Jan/Feb. The impact is also visible in specific retail channels. The CPI fell in October. Let’s look for any impact in the Advance Retail $ales

The big change from September is that all but Auto and 3 small channels are up from last month. In September, all were down. Actually, this is truly the norm. 2009 is the only year since 1992 in which Total Retail sales fell Sep>Oct. The average increase is 3.4% so the 2.3% lift in 2023 is considerably smaller. On the plus side, all actual $ measurements are again positive vs 22, 21 & 19 for all big groups but Gas Stations. However, you will also see that the lifts vs 2022 are still low. Inflation is a big factor. However, the national CPI slowed from 3.7% to 3.2% and the all commodities rate, which is the best pricing measure for Retail, fell from 1.4% to 0.4%. There is some significant “real” good news. The big groups have 20 “real” sales measurements vs 22 & 21. In September and again in October, only 6 were negative and 4 of those came from Gas Stations. Relevant Retail’s real monthly sales vs 22 have now been positive for 4 straight months. Note: The monthly % lift vs 22 for Relevant & Total Retail is still less than half of Jan & Feb levels

Overall – Inflation Reality – Gas prices fell, and Auto prices are still down vs 22. For Total Retail, the rate was again below the sales lift and all real sales are positive. For Restaurants, inflation remains high, +5.4% but they are still really positive vs 22 & 21. Monthly real sales for Relative Retail vs last 22 are positive again. That’s 5 of the last 6 months but only 5 of the last 20. Also, again only their Ytd Real sales vs 2022 are down. They continue to make slow progress.

Total Retail – Since June 2020, every month but April 23 has set a monthly sales record. December 22 $ were $748.9B, a new all-time record. Sales have been on a rollercoaster. Up in July & Aug, down in September, then up in October. Inflation is only 0.4% but sales growth is still low. Sales are up 2.7% vs last year. That’s only 34% of their average 19>23 growth. All real sales measurements are again positive but only 35% of the 19>23 growth is real. Inflation in Total Retail has radically slowed vs 2022 but we still see its cumulative impact. Avg 2019>23 Growth: +7.9%, Real: +2.9%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They have the biggest increases vs 22, 21 & 19 and all real sales are positive. Inflation slowed to 5.4% from 6.0% last month but is still +14.3% vs 21 and +22.1% vs 19. 37.7% of their 40.9% growth since 19 is real but they remain 2nd in performance behind Relevant Retail. Recovery started late but inflation started early. Avg 2019>23 Growth: +8.9%, Real: +3.6%. They just account for 13.2% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – They actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their real 22 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 is a true rollercoaster. $ grew in Jan>Feb, fell Mar>Apr, grew in May, fell Jun>Jul, grew in Aug, fell in Sep, then grew in Oct. Only Ytd real sales vs 21 are down. Prices vs 22 are -2.1% monthly & -1.6% Ytd. Only 6% of 19>23 growth is real. Avg 2019>23 Growth: +6.7%, Real: +0.5%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb 23, strongly dropped in Mar>Jul to -20.2%. In August they turned up to -3.7%. In Sep they were +2.7% but fell to -5.6% in Oct. Pricing is a big factor in the monthly & Ytd sales drops vs 22. Real sales vs 22, 21 & 19 are down both monthly & YTD.  Avg 2019>23 Growth: +6.6%, Real: -1.3%. The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, Jan & Feb had normal drops then grew in March, starting another roller coaster. Sales fell in Jun>Jul, turned up in Aug, fell in Sep, then grew in Oct. Actual sales are up vs 22, 21 & 19. Real sales are only down Ytd vs 22. Monthly Real sales vs last year are again up. That’s 5 of the last 6 months, but only 5 of the last 20. 48% of their 19>23 growth is real – #1 in performance. Avg 2019>23 Growth is: +8.3%, Real: +4.2%. This group is where America shops. Another month of positive real sales is a good sign.

Inflation is still low but the cumulative impact is still there. Sales increases are still small, but the fact that 88% of all Non-Gas Station real sales numbers vs 22 & 21 are still positive is a good sign. Restaurants are still doing well, and Auto is improving. Inflation/Deflation has caused a drop in Gas Stations’ actual sales. Our biggest concern is Relevant Retail. Their situation is improving. Ytd real sales vs 22 are still negative, which shows the impact of cumulative inflation, but monthly real sales vs 22 have now been positive in 5 of the last 6 months. The slow turnaround continues.

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

  • Relevant Retail: Avg Growth Rate: +8.3%, Real: +4.2%. 8 of 11 were up from September but only 7 were up vs 22 & vs 21. Only 4 had a “real” increase vs 22 & 3 vs 21. Inflation continues to slow sales increases.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are up from September but down for all comparisons but Ytd vs 21 & 19. Their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +0.2%, Real: -2.5%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are up from September and in all other measurements. Their real sales are down monthly vs 22 and Ytd vs 22 & 21. Only 36% of their 28.4% 19>23 lift is real – the impact of inflation. Avg Growth: +6.5%, Real: +2.5%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are up from September and in all measurements vs 22, 21 & 19. However, inflation hit them hard. Real sales are down for all but Ytd vs 2019 and only 5.9% of the growth since 2019 is real. Avg Growth: +6.2%, Real: +0.4%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are up from September and positive in all other measurements, actual and real vs 22, 21 & 19. Inflation has been relatively low so 72% of their 25.4% growth from 2019 is real. Avg 2019>23 Growth: +5.8%, Real: +4.3%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual $ales are up from September and only down vs Oct 22. Their real sales are now down monthly and Ytd vs 22 & 21. However, 64% of their 19>23 growth is real. Avg 2019>23 Growth: +3.9%, Real:+2.5%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were high in 2022. Sales are down from September and negative in all other measurements but actual Ytd vs 2019. Their real sales are even down -3.6% vs 2019. Avg 2019>23 Growth: +3.0%, Real: -0.9%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are down from September and in all measurements but vs Oct 22 and Ytd vs 19. However, consistent deflation has caused real sales to be up in all measurements. Avg 2019>23 Growth: +0.6%, Real: +2.7%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Inflation is still high at 4.2%. Sales are up from September, but they are again all negative vs 2022. They have the 2nd highest Inflation of any channel so real sales are negative in all but Ytd vs 2019. Also, just 20% of their sales growth since 2019 is real. Avg 2019>23 Growth is: +7.7%, Real: +1.7%.
  • 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. Actual $ales are down from September, but positive for all but vs Oct 22 & 21. Real sales are down for all but YTD vs 22 & 19. Prices deflated again and their inflation rate has been lower than most groups so 66.2% of their 29.3% growth since 2019 is real. Avg 2019>23 Growth: +6.6%, Real: +4.5%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are up vs September and positive in all measurements. Real sales are only down vs Oct & Ytd 22. They are 2nd to NonStore in increases vs 21 & 19. 65% of their 41.1% 19>23 growth and 46% of their 21>23 growth is real. Their Avg 19>23 Growth is: 9.0%, Real: 6.1%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are up from September and in all other measurements. 78% of their 86.5% growth since 2019 is real. Their Avg Growth: +16.9%, Real: +13.7%.

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its peak in June 2022, which should help the Retail Situation. Sales were up from September for all big groups & most channels. Inflation is slowing in many channels and even deflating in a few. However, some channels like Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling. Only a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed and is even below the lower inflation rate. Real monthly sales for Relevant Retail have been positive vs 22 for 5 of the last 6 months but are still negative for 7 of 11 channels. The turnaround for Relevant retail is not widespread. It is primarily being driven by NonStore with a little help from Health Care. October was again a mixed bag of pluses and minuses. We still have a long way to go for a full recovery from the inflation tsunami.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes from 2021 to 2023 to show cumulative inflation.

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

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

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

Retail Channel Monthly $ Update – August Final & September Advance

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

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

We will begin with the August Final Report and then go to the Advance Report for September. Our focus is comparing to last year but also 2021 and 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

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

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

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

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

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

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

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

  • Building Material Stores – The pandemic focus on home has produced sales growth of 34.9% since 2019. Prices for the Bldg/Matl group have inflated 19.9% since 2021 which is having an impact. HomeCtr/Hdwe stores are down monthly & Ytd vs 22 but up vs 21 &19. Farm Stores are up in all measurements but vs Aug 22. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 20.6% of their 19>23 lift was real. It was only this high because most of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 7.2%, Real: 1.2%; Farm: 11.4%, Real: 5.2%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation has flipped as the Grocery rate is now 33% lower than Drug/Med products. Drug Stores are positive in all measurements and 73% of their growth since 2019 is real. While the $ are up for Supermarkets, except vs Aug 22 their 23 real sales are down vs 22 & 21 and just slightly positive vs 2019. Only 6% is real growth. Avg 19>23 Growth: Supermarkets: +6.2%, Real: +0.4%; Drug Stores: +5.6%, Real: +4.1%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up from July and are actually & really up vs 2022 and 2019. Vs 2021, real & actual $ vs August are up. YTD is down. Prices are still deflating -1.2%, a big change from +5.4% in 21>22 and +6.5% in 20>21. The result is that 59% of their 42.2% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.2%; Real: +5.7%.
  • Gen Mdse Stores – All were up vs July and actual sales vs 22, 21 & 19 were up for all but Disc Dept Stores vs August 22. In real sales both SupCtr/Clubs & $/Value Stores were up vs Aug 22 & 21 and $ stores were also up YTD vs 22. Disc Dept Stores are the worst performer and are the only real negative vs 2019, -1.6%. The other channels average 35% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.2%, Real: 2.2%; $/Value Strs: +6.7%, Real: +2.7%; Disc. Dept.: +2.3%, Real: -0.4%
  • Office, Gift & Souvenir Stores – Actual sales are up 0.2% from July but down vs August 22 & 21. They were up in YTD measurements vs 22, 21 & 19. Their real sales numbers are all negative including -7.4% Ytd vs 2019. Their recovery started late, and their slow progress appears to have stalled in Jun>Aug. Avg Growth Rate: +0.7%, Real: -1.9%
  • Internet/Mail Order – Sales are up from July and still above $100B at $105.6B – another record for the month. All measurements are positive, but their growth is only 49% of their average since 2019. However, 79% of their 96% growth since 2019 is real. Avg Growth: +18.3%, Real: +15.2%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, then fell in Jun>Aug, However, all measurements except actual & real vs August 2022, are positive. They are still the % increase leader vs 2021 (barely) and 71% of their 54.3% growth since 2019 is real. Average 19>23 Growth: +11.5%, Real: +8.5%. They are still 2nd in growth since 2019 to the internet. Pet Stores are definitely contributing.

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

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

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

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

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They have the biggest increases vs 22, 21 & 19 and all real sales are positive. Inflation slowed to 6.0% from 6.5% last month but is still +14.8% vs 21 and +21.9% vs 19. 38.1% of their 40.9% growth since 19 is real but they remain 2nd in performance behind Relevant Retail. Recovery started late but inflation started early. Avg 2019>23 Growth: +8.9%, Real: +3.7%. They just account for 13.2% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 2022 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 started off a little better. $ grew in Jan>Feb, fell in Mar>Apr, grew in May, fell in Jun>Jul, grew in Aug, then fell in Sep. Only Ytd real sales vs 21 are negative. Prices vs 22 are -2.3% monthly & -1.5% Ytd but only 7% of 19>23 growth is real. Avg 2019>23 Growth: +6.7%, Real: +0.5%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb 23, strongly dropped in Mar>Jul to -20.2%. In August they turned up to -3.7%. In September, they are +2.7% and +21.9% vs 21. Pricing is a big factor in the monthly & Ytd sales drops vs 22. Real sales vs 22, 21 & 19 are now down monthly & YTD.  Avg 2019>23 Growth: +6.5%, Real: -1.3%. The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, Jan & Feb had normal drops then grew in March, starting another roller coaster. Sales fell in Jun>Jul, turned up in Aug, then fell in Sep. All actual sales are up vs 22, 21 & 19. Real sales are only down Ytd vs 22. Monthly Real sales vs last year are again positive. That’s 4 of the last 5 months, but only 4 of the last 19. 48% of their 19>23 growth is real – #1 in performance. Avg 2019>23 Growth is: +8.3%, Real: +4.3%. This group is where America shops. Another month of positive real sales is a good sign.

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

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

  • Relevant Retail: Avg Growth Rate: +8.3%, Real: +4.3%. All were down from August but 5 were up vs 22 & 8 vs 21. Only 4 had a “real” increase vs 22 & 5 vs 21. Inflation continues to slow sales increases.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are down from August and for all comparisons but Ytd vs 21 & 19. Their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +0.2%, Real: -2.5%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are down from August but up in all other measurements. Their real sales are up in all measurements but Ytd vs 22 & 21. Only 36% of their 28.2% 19>23 lift is real – the impact of inflation. Avg Growth: +6.4%, Real: +2.4%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. $ are down from August but up in all measurements vs 22, 21 & 19. However, inflation hit them hard. Real sales are down for all but Ytd vs 2019 and only 6.2% of the growth since 2019 is real. Avg Growth: +6.2%, Real: +0.4%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from August but positive in all other measurements, actual and real vs 22, 21 & 19. Their inflation rate has been relatively low so 73% of their 25.2% growth from 2019 is real. Avg 2019>23 Growth: +5.8%, Real: +4.3%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual $ales are down from August but up vs 22, 21 & 19. Their real sales are now down monthly vs 22 & 21 and Ytd vs 22. However, 64% of their 19>23 growth is real. Avg 2019>23 Growth: +3.9%, Real:+2.5%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were very high in 2022. Sales are down from August and negative in all other measurements but actual Ytd vs 2019. Their real sales are even down -2.7% vs 2019. Avg 2019>23 Growth: +3.3%, Real: -0.7%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are down from August and in all measurements but Ytd vs 19. However, consistent deflation has caused real sales to be up in all measurements. Avg 2019>23 Growth: +0.5%, Real: +2.6%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Inflation is still high at 6.3%. Sales are down from August and they are again all negative vs 2022. They still have the highest Inflation of any channel so real sales are negative in all but Ytd vs 2019. Also, just 21% of their sales growth since 2019 is real. Avg 2019>23 Growth is: +7.8%, Real: +1.8%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. Actual $ales are down from August, but positive for all but vs Sep 22. Real sales are down for all but YTD vs 22 & 19. Prices deflated again and their inflation rate has been lower than most groups so 66.1% of their 29.8% growth since 2019 is real. Avg 2019>23 Growth: +6.7%, Real: +4.6%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are down vs August but positive in all but vs Sep 22. Real sales are only down vs Sep & Ytd 22. They are 2nd to NonStore in increases vs 21 & 19. 65% of their 41.8% 19>23 growth and 46% of their 21>23 growth is real. Their Avg 19>23 Growth is: 9.1%, Real: 6.2%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ are down from August but all other measurements are up. 78% of their 87.2% growth since 2019 is real. Their Avg Growth: +17.0%, Real: +13.8%.

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Despite the recent uptick in Commodities prices, inflation has slowed considerably from its peak in June 2022, which should help the Retail Situation. Sales were down from August for all groups & channels. Inflation is slowing in many channels and even deflating in a few. However, some channels like Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling. Only a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed and is even below the lower inflation rate. Real monthly sales for Relevant Retail have been positive vs 22 for 4 of the last 5 months but are still negative for 7 of 11 channels. The turnaround for Relevant retail is not widespread. It is primarily being driven by NonStore with a little help from Health Care. September was truly a mixed bag of pluses and minuses compared to August. We still have a long way to go for a full recovery from the inflation tsunami.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes from 2021 to 2023 to show cumulative inflation.

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

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

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

While the Big Stores sell much more fresh groceries, Groceries account for ¼ of $ Store sales. Both Channels generally offer most of the same product categories, but the actual product mix is different.

Retail Channel Monthly $ Update – July Final & August Advance

Commodities prices rose in August and the cumulative effect of inflation on consumer spending is still being felt. The rate of sales increases is still slower than the decrease in inflation in a number of channels, which causes a drop in the amount of product sold. A recovery may have started but there is still a long road ahead, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

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

We will begin with the Final Report for July and then go to the Advance Report for August. Our focus is comparing to last year but also 2021 and 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

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

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

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2022 and 2021.
    • Current Month Real change for 2023 vs 2022 and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for 2023 vs 2022, 2021 and 2019.
    • Current Ytd Real change % for 2023 vs 2022, 2021 and 2019
  • Monthly & Ytd $ & CPIs for 22>23 and 21>23 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the July Final. 3 were down from June. However, all but Gas Stations were up vs 22, 21 & 19. When you consider inflation, the total number of drops vs 22 & 21 (10) was the same as June. Gas Stations are still really down vs 2019. The biggest change may be that Relevant Retail is again “really” up monthly vs 22. (All $ are Actual, Not Seasonally Adjusted)

The July Final is -$3.8B less than the Advance. Specifically, Restaurants: -$0.7B; Auto: -$0.7B; Gas Stations: -$0.2B; Relevant Retail: -$2.2B. Sales were up from June only in Restaurants & Gas Stations but actual sales for all but Gas Stations were positive in all measurements vs 22, 21 & 19. Strong deflation caused Gas Stations sales to again drop monthly & YTD vs 22. Vs 22 & 21, there were 10 “real” sales drops, 8 vs 21. Restaurants have the most growth and are the only group with all positives. Monthly real sales for Relevant Retail vs 22 are up but have been down in 15 of the last 17 months. Other real measurements vs 22 & 21 are negative. They are the top performer vs 2019 but only 48% of the growth is real.

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

Overall– 5 were up from June, but vs 22, 8 were up vs July and 10 YTD. 6 were “really” down monthly & Ytd. Vs 2021, 10 had increases but only 2 monthly & 3 Ytd were real. Vs 2019, Off/Gift/Souv & Disc Dept Strs were really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 34.6% since 2019. Prices for the Bldg/Matl group have inflated 19.0% since 2021 which is having an impact. HomeCtr/Hdwe stores are down for the month & Ytd vs 22 but up vs 21 &19. Farm Stores are up in all measurements. However, both have all negative real numbers vs 2022 & 2021. Importantly, only 19.9% of their 19>23 lift was real. It was only this high because most of the lift came prior to the inflation wave. Avg 19>23 Growth: HomeCtr/Hdwe: 7.1%, Real: 1.1%; Farm: 11.3%, Real: 5.1%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. They have been very different in inflation and the situation just flipped as the Grocery rate is now 12% lower than Drug/Med products. Drug Stores are positive in all but real sales vs July 22 and 73% of their growth since 2019 is real. While the $ are up for Supermarkets their 2023 real sales are down vs 22 & 21 and just slightly positive vs 2019. Only 7% is real growth. Avg 19>23 Growth: Supermarkets: +6.3%, Real: +0.5%; Drug Stores: +5.4%, Real: +4.0%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down from June but are actually & really up vs 2022 and 2019. Vs 2021 the only increase is in actual $ vs July. Prices are still deflating -0.5%, a big change from +5.4% in 21>22 and +6.5% in 20>21. The result is that 59% of their 43.1% lift since 2019 is real. Their Avg 19>23 Growth Rate is: +9.4%; Real: +5.8%.
  • Gen Mdse Stores – Only $ stores were down vs June but actual sales vs 22, 21 & 19 were up for all but Disc Dept Stores vs July 22 & 21. In real sales vs 22 & 21 $/Value Stores had the only positives – vs July 22 & 21. Disc Dept Stores are the worst performer and are the only real negative vs 2019, -1.1%. The other channels average 35% In real growth. Avg 19>23 Growth: SupCtr/Club: 6.2%, Real: 2.3%; $/Value Strs: +6.7%, Real: +2.7%; Disc. Dept.: +2.4%, Real: -0.3%
  • Office, Gift & Souvenir Stores – Actual sales are up 4.6% from June but down from July 22. They were up in all other measurements vs 22, 21 & 19. Their real sales numbers are all negative including -7.3% Ytd vs 2019. Their recovery started late and their slow progress appears to have stalled in Jun>Jul. Avg Growth Rate: +0.8%, Real: -1.9%
  • Internet/Mail Order – Sales are up from June and above $100B again at $103.4B – another record for the month. All measurements are positive, but their growth is only 61% of their average since 2019. However, 79% of their 96% growth since 2019 is real. Avg Growth: +18.4%, Real: +15.2%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, turned up in Mar>May, then fell in June & July. However, all measurements vs 22, 21 & 19 are positive. They are still the % increase leader vs 2021 (barely) and 72% of their 55.8% growth since 2019 is real. Average 19>23 Growth: +11.7%, Real: +8.8%. They are still 2nd in growth since 2019 to the internet. Pet Stores are surely contributing.

Inflation remains an important factor in Retail. In actual $, 8 channels reported increases in sales vs 2022 and 10 vs 2021. When you factor in inflation, the number with any “real” growth drops to 5 vs 2022 & 2 vs 2021. Inflation has impacted sales increases. Vs 2022 July was a little better than June, but the lift was still only 50% of Jan/Feb. The impact is very visible at the retail channel level. Inflation grew in August. Let’s look at the impact in the August Advance Retail $ales.

Since 2019, we have seen the 2 biggest monthly drops in history but a lot of positives in the recovery. Total Retail sales reached $700B in a month for the 1st time and broke the $7T barrier in 2021. Relevant Retail was also strong as annual sales reached $4T in 2021 and all big groups set annual $ales records. In 2022 radical inflation was a big factor. First, this reduces the amount of product sold but not $ spent. Total Retail hit $8T and all groups again set new annual records in 2022. In 2023, sales got on an up/down rollercoaster. In July only 2 groups were up. In August, all but Restaurants were up. Except for Gas Stations, all actual sales are positive vs 22, 21 & 19. There is also some more good news. The groups have 20 “real” sales measurements vs 22 & 21. 13 are now positive. Relevant Retail’s real monthly sales vs 22 has been up for 2 straight months. Note: The lift vs 22 is up from July for Relevant & Total Retail but still far below Jan & Feb levels

Overall – Inflation Reality – Auto & Gas prices are still down vs 22. For Total & Relevant Retail, the rate was again below the sales lift. For Restaurants, inflation remains high, +6.5% but they are still the only group really positive vs 22 & 21. The biggest news is that monthly real sales for Relative Retail vs last year are positive again. That’s 3 of the last 4 months but only 3 of the last 18. Also, their Ytd Real sales are still down vs 2022 & 2021. They still have a ways to go.

Total Retail – Since June 2020, every month but April 23 has set a monthly sales record. December 22 $ were $748.9B, a new all-time record. Sales have been on a rollercoaster. They grew in May, fell in June & grew in July>Aug. Inflation is  only 1% but sales growth is still low. Sales are up 2.9% vs last year. That’s only 37% of their average 19>23 growth. Monthly real sales vs 21 are now positive but Ytd is still down and only 34% of the 19>23 growth is real. Inflation in Total Retail has radically slowed vs 2022 but we still see its cumulative impact. Avg 2019>23 Growth: +7.8%, Real: +2.9%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $91B in December and exceeding $1T in 2022 for the 1st time. They have the biggest increases vs 22, 21 & 19 and all real sales are positive. Inflation slowed to 6.5% from 7.1% last month but is still +14.9% vs 21 and +21.7% vs 19. 38.4% of their 40.6% growth since 19 is real but they remain 2nd in performance behind Relevant Retail. Recovery started late but inflation started early. Avg 2019>23 Growth: +8.9%, Real: +3.7%. They just account for 13.1% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 2022 sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 2021>2022. This is bad but their real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 started off a little better in Jan>Feb, got worse in Mar>Apr, grew in May, fell in Jun>Jul, then grew in August. Only Ytd real sales vs 21 are negative. Prices vs 22 are -1.9% monthly & -1.4% Ytd. Only 5% of 19>23 growth is real. Avg 2019>23 Growth: +6.6%, Real: +0.4%.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb, strongly dropped in Mar>Jul to -20.2%. In August they turned up to -3.7%. However, they are still +21.5% vs 21. Deflation is a big factor in the monthly & Ytd sales drops vs 22. Real Ytd sales vs 22 are up slightly but still down vs 21 & 19.  Avg 2019>23 Growth: +6.3%, Real: -1.3%. The numbers show the cumulative impact of inflation and demonstrate how strong deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for 60+% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, Jan & Feb had normal drops then grew in March, starting another roller coaster. Sales fell in Jun>Jul but turned up in August. All actual sales are up vs 22, 21 & 19. Real sales are only down Ytd vs 22 & 21. Monthly Real sales vs last year are again positive. That’s 3 of the last 4 months, but also only 3 of the last 18. 48% of their 19>23 $ales growth is real – #1 in performance. Avg 2019>23 Growth is: +8.3%, Real: +4.2%. This big group is where America shops. The fact that real sales stayed positive gives us hope.

Inflation is still relatively low but the cumulative impact is still there. Sales increases are still low, but the fact that 65% of all real sales numbers vs 22 & 21 are positive is a good sign. Restaurants are still doing well, and Auto is improving. Gas Stations saw the negative impact of strong deflation with an ongoing drop in actual sales. Now prices have turned up. As always, our biggest concern is Relevant Retail. Their situation has definitely improved. Ytd real sales vs 22 & 21 are still negative, which clearly shows the impact of cumulative inflation. However, monthly real sales vs 22 have now been positive in 3 of the last 4 months. This is not the end of the crisis, but a slow turnaround appears to be continuing.

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

  • Relevant Retail: Avg Growth Rate: +8.3%, Real: +4.2%. 10 channels were up from July but only 5 were up vs 22 & 8 vs 21. Only 5 had a “real” increase vs 22 & 7 vs 21. The negative impact of inflation appears to be slowing sales increases.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Their Actual $ are up from July but down for all comparisons but Ytd vs 21 & 19. Their real sales are down in all measurements, even vs 2019. Avg 2019>23 Growth: +0.1%, Real: -2.6%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. $ales are up vs July and in all other measurements. Their real sales are down in all measurements but Ytd vs 21 & 19. Only 34% of their 27.4% 19>23 lift is real – the impact of inflation. 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. $ are down from July but up in all measurements vs 22, 21 & 19. However, inflation hit them hard. Real sales are down for all but Ytd vs 2019 and only 5.6% of the growth since 2019 is real. Avg Growth: +6.2%, Real: +0.4%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are up from July and positive in all other measurements, both actual and real vs 22, 21 & 19. Their inflation rate has been relatively low so 73% of their 24.4% growth from 2019 is real. Avg 2019>23 Growth: +5.6%, Real: +4.2%.
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Actual $ales are up from July and vs 22, 21 & 19. Their real sales are only down for Ytd vs 22. Another positive is that 62% of their 2019>23 growth is real. Avg 2019>23 Growth: +3.7%, Real:+2.4%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are now deflating but they were very high in 2022. Sales are up from July but negative in all other measurements but actual Ytd vs 2019. Their real sales are even down vs 2019. Avg 2019>23 Growth: +3.4%, Real: -0.6%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. $ales are up from July but down in all measurements but Ytd vs 19. However, consistent deflation has caused real sales to be up in all measurements. Avg 2019>23 Growth: +0.4%, Real: +2.4%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Inflation is still high at 7.4%. Sales are down from July and they are again all negative vs 2022. They still have the highest Inflation of any channel so real sales are negative in all but Ytd vs 2019. Also, just 20% of their sales growth since 2019 is real. Avg 2019>23 Growth is: +7.7%, Real: +1.7%.
  • 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. Actual $ales are down from July but positive for all but vs Aug 22. Real sales are only down vs Aug 22 and Ytd vs 21. Prices deflated again and their inflation rate has been lower than most groups so 65.7% of their 29.7% growth since 2019 is real. Avg 2019>23 Growth: +6.7%, Real: +4.6%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are up vs July and positive in all but vs August 22. Real sales are only down vs August & Ytd 22. They are still 2nd to NonStore in increases vs 21 & 19. 66% of their 42.2% 19>23 growth and even 48% of their 21>23 growth is real. Their Avg 19>23 Growth is: 9.2%, Real: 6.3%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier. Their growth slowed significantly in 2022 and now 2023. $ales are up from July and all other measurements, both actual and real, are positive. 78% of their 87.5% growth since 2019 is real. Their Avg Growth: +17.0%, Real: +13.9%.

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 and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Despite the recent uptick, inflation has slowed considerably from its peak in June 2022, which should help the Retail Situation. Sales were up from July for 4 big groups and 10 smaller channels. Inflation is slowing in many channels and even deflating in a few. However, some channels like Gas Stations, Grocery and Bldg Material stores still have high cumulative inflation rates so they are still struggling. Only a few channels are doing well. The new problem is that the sales increase rate vs 2022 for many channels has slowed and is even below the lower inflation rate. Real monthly sales for Relevant Retail have been positive vs 22 for 3 of the last 4 months but are still negative for 6 of 11 channels. The turnaround for Relevant retail is not widespread. It is primarily being driven by NonStore with a little help from Health Care. Overall, August was a little better than July, but we still have a long way to go for a full recovery from the inflation tsunami.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates. The data also includes the CPI changes from 2021 to 2023 to show cumulative inflation.

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

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

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