Archive for category: Pet Market Distribution Channels

In our 30 year history of Pet Stores, we tracked their rise to the top spot in pet products sales, which was largely due to the creation and rapid growth of chains and Pet SuperStores. They gained the #1 position in 1997 and have held it ever since. However, that journey has not been without challenges. They maintained a 40% market share in Pet Products in 1997 and 2002 but that fell to 33.1% in 2012 due to increased competition from the mass market. From 2012 to 2017, there was a new challenger – the Internet, but Pet Stores remained strong. They increased their share of Pet Products sales slightly to 33.3%. This was a small, but very significant gain as Pet Stores and $ Stores were the only 2 retail channels to gain market share in Pet Products $ in this 1^st Internet Tsunami.

There is no doubt that that Pet Stores are resilient and a key consumer channel for Pet Parents. However, not all pet stores are the same. There is the key difference of Indies vs Chains. However, not all chains are created equal. They range from small local chains to regional to the national behemoths. In this report we will look at how these groups have progressed from 2002 to 2017, with an especially deep look at who stood their ground from 2012 to 2017 and how they did it.

We’ll start with the share of stores and Total $ for 2017 for independents and various sizes of chains. Remember, there were 9984 pet stores (with employees) in 2017, an increase of 1192 (+13.6%) from 2012. $ales showed even stronger growth, up $3.6B (+24.7%) to $18.4B in 2017.

Pet Store Numbers – Indies lost a little ground while the big chains are growing at a staggering rate. The small local chains (2>9 Stores) are also growing, especially the 5>9 group. The 10>24 group lost share, but they are basically in a transitional step on their way to 25+ stores. Chain Stores have more than half of all pet outlets with employees, 51.5%.

Pet Store $ales – The big chains dominate Pet Store $, 71.5%. However, $ales in the Indies and small local chains are still growing. $ales in the small chains are actually growing at a significantly higher rate than the big guys.

This shows where the pet store channel is at. Let’s see how it got there with data from 2002 to 2017. First # of Stores

Share of Pet Stores

• The number of Pet Stores grew from 7626 in 2002 to 9984 in 2017, an increase of 2358 (+30.9%).
• The number of Indies has slowly but steadily declined from 5285 in 2002 to 4839 in 2017, -446 (-8.4%)
• During the same period, chain store outlets have more than doubled, from 2341 in 2002 to 5145 in 2017, +2804 (+119.8%).
• That makes 2017 a very significant year. Independent Pet Stores were a key part of the foundation of the Pet Industry. For the 1^st time they were outnumbered by chain stores.
• The big chains, 25+ stores, have been the driving force in the growth in the number of Pet Stores in the 21^st century. They went from 1512 stores in 2002 to 4287 in 2017, +2775 (+183.5%) – almost triple.
• The 10>24 Store chains are a transitional phase, so their market share has been up and down. They are often focused on growing numbers for a stronger regional or even national presence so many move up to the 25+ group.
• The 2>9 group is a combination of the 2>4 and 5>9 store groups and was created because their growth pattern is very similar. As you can see, their share of stores fell consistently from 2002 to 2012. Their store count fell from 646 to 554, -14.2% during this period. Then they turned it around. They added 16 more companies and 72 stores (+13.0%) between 2012 and 2017. They didn’t gain share but held their ground vs the big guys.

Now let’s look how the share of Pet Store $ have “evolved” over the same period.

Share of Pet Store $

• Pet Store $ales grew from $7.6B in 2002 to $18.4B in 2017, a $10.8B (+142.1%) increase.
• Independent Store $ increased from $2.4B to $3.8B, +$1.4B (+58.3%) during those years. That’s a 3.1% annual increase but it wasn’t nearly enough as they lost significant share through 2012. 2012>2017 was a different story. Their sales increased +22.1%. They lost 0.4% in share but essentially “held their ground”.
• Chain stores have dominated the $ in this channel since 1997. Between 2002 and 2017 their total sales grew from $5.2B to $14.6B (+180.8%). As Indies lost share, they gained. From 2012 to 2017, their sales increased +$2.9B (+25.4%). However, like the Indies, their share essentially plateaued.
• Like store count, the big chains have driven the growth in Pet Store $. Their sales grew $4.3B, +104.7% between 2002 and 2017. However, their growth from 2012 to 2017 was 25.1%, slightly below the rate of total chain $.
• The transitional 10>24 Store chains had an up and down pattern that exactly mirrored their pattern in store count. They had a 2.1% increase in $ from 2012 to 2017 which resulted in a 27.6% drop in share, from 2.9% to 2.1%.
• The 2>9 Store local chain group earned the only green highlight on the chart. From 2002 to 2012 their $ grew +2.7% but Their share of $ was nearly cut in half. The 2012>2017 period had a radically different story. Their $ales grew +$0.34B (+47.1%), by far the biggest percentage increase of any group. At $1.05B, they broke the “billion $ barrier” for the first time. Their share of $ grew 0.9% to 5.7%, an 18.8% increase.

This last chart on share of $ told a similar story to the store count chart up until 2012. Then some patterns changed. This suggests that we should take a closer look at what happened between 2012 and 2017. In this next chart we look at the % change in some key measurements from 2012 to 2017 for the different groups of Pet Stores.

Before we get to the specifics for each group, we’ll comment about how each measurement relates to our “deep dive”.

• Total $ – The gap between share of $ for Chains and Independents had been growing through 2012. Then the growth flattened out in 2017. This change in pattern indicated that we should look a little deeper. There are 2 primary drivers behind a change in $ – Number of Stores and Average Sales per store.
• # of Stores – This is often the main reason behind a change in $. If your business model remains unchanged, then your $ are connected to your store count – up or down.
• Avg $/Store – This can reflect product trends in the industry and is also a measure of your consumer appeal. The movement to Super Premium Pet Foods began in 2014/15 and had a differing impact upon the groups.
• # of Employees – If you don’t change your in store business model, this should be directly tied to store count.
• Avg # Employees/Store – Employees have a variety of functions, including stocking shelves, building displays and keeping the store “cleaned and polished”. However, the most important responsibility may be interacting with customers. Pet Parents want interaction and discussion when they are shopping for products for their Pet “Children”. This has been a key reason that Pet Stores have maintained the top $ position over other channels.

Now, let’s see how the various Pet Store groups performed in these areas between 2012 and 2017.

• All Pet Stores – This will be a key group for comparison as it reflects the progress of the entire Pet Store Channel.
  • Total $: $18.4B, +24.7%
  • # Stores: 9984, +13.6%
  • Avg $/Str: $1.84M, +9.8%
  • # Employees: 119.9K, +13.6%
  • # Employ/Str: 12.01, +0.01%

The growth in Total $ came from both increased store count and $ per store but more stores was the biggest driver. In terms of employees, the overall model was unchanged as employees/store went from 12.0 to 12.01.

• Single Stores – They don’t have the most number of stores for the 1^st time in history.
  • Total $: $3.8B, +22.2%
  • # Stores: 4839, -2.5%
  • Avg $/Str: $0.78M, +25.3%
  • # Employees: 29.3K, +8.3%
  • # Employ/Str: 6.1, +11.0%

They lost some stores but radically increased the $ per store. Specialty Super Premium foods and increased consumer connection from more employees per store were factors in holding their ground in share of $.

• All Chains – Now, the biggest group in both $ and Stores. We’ll look for similarities and differences within the group.
  • Total $: $14.6B, +25.3%
  • # Stores: 5145, +34.3%
  • Avg $/Str: $2.83M, -6.7%
  • # Employees: 90.6K, +15.5%
  • # Employ/Str: 17.6, -14.0%

Overall, their $ growth slightly exceeded the channels growth rate, but it was entirely driven by more stores as the average store sales fell. They also added a lot of employees but the employees per store fell significantly. One factor is that some chains began adding smaller format stores to save money and have a more personal experience.

• 2>4 Store Chains – We added this group back in to look for differences between them and the 5>9 Store group.
  • Total $: $0.55B, +37.3%
  • # Stores: 362, +7.4%
  • Avg $/Str: $1.53M, +27.8%
  • # Employees: 4.4K, +26.3
  • # Employ/Str: 12.2, +17.6%

This group represents a critical time for Pet Store owners. They have a successful store. Could they do even better if they added another location or 2.  In 2017, more companies opted in, but others continued to grow and moved up to the 5>9 group. They grew 7.4% in stores but increased the number of employees per store by twice that amount, +17.6%. This is important any time, but it was extremely important in the movement to Super Premium food. They offered the product but also had the personnel to discuss the consumers’ wants and needs. This helped drive their per store sales up 27.8%, to a level double that of Single Stores and produced a 37.3% increase in Total $.

• 5>9 Store Chains – This group, with more stores and better coverage can become a major force in local markets.
  • Total $: $0.50B, +59.9%
  • # Stores: 264, +21.7%
  • Avg $/Str: $1.89M, +31.4%
  • # Employees: 3.1K, +34.7%
  • # Employ/Str: 11.7, +10.8%

This group had a game plan similar to the 2>4 group but with even stronger results. They added even more stores. This, in combination with increased store sales drove Total $ up 60%. They have the stores and people to be strong competition to the big chains in their local market.

• 10>24 Store Chains – Most are committed to further growth so there is a continual influx and outflow of companies.
  • Total $: $0.39B, -7.2%
  • # Stores: 232, -15.0%
  • Avg $/Str: $1.69M, +9.2%
  • # Employees: 2.3K, -0.4%
  • # Employ/Str: 9.7, +17.2%

This is a transitional group, on their way up. They added employees per store and increased Store sales. Their Total $ fell solely because of a 15% drop in the number of stores.

• 25+ Store Chains – This group is the dominant force in the Pet Store Channel and has been since the 90’s.
  • Total $: $13.1B, +25.1%
  • # Stores: 4287, +42.7%
  • Avg $/Str: $3.06M, -12.3%
  • # Employees: 80.8K, +14.8%
  • # Employ/Str: 18.8, -19.5%

With 42.9% of the stores and 71.5% of the $, there is no doubt this is the dominant group in the Pet Store channel. Their $2.6B (+25.1%) increase was also 72.6% of the Total $ increase for Pet Stores. They are the group that allowed Pet Stores to maintain and gain in market share of pet products against the Mass Market and an Internet Tsunami. With that being said, the group continues to evolve with many new smaller footprint stores designed to give Pet Parents an even more personal retail experience. This contributed to fewer employees per store and reduced Store volume. One thing hasn’t changed. They continue to open stores at a spectacular pace.

Observations

The movement to personalize our pets really came to the forefront of Pet $ with the strong movement to Super Premium Foods which began in the 2^nd half of 2014 with Millennials and then spread to Boomers and ultimately became widespread across the consumer marketplace. The big chains remain the bulwark of the Pet Store channel. However, they provided a wall of protection which allowed small, localized chains to grow and prosper. They offer a more personal shopping experience and often were the first to stock and sell some new Super Premium pet foods. You see the results of this broadened appeal in the increase in per store sales for all pet stores with fewer than 25 outlets, including Indies. The biggest % growth in store $ occurred in the 2>4 and 5>9 groups. The 5>9 store group became especially stronger with a 60% increase in Total $. The reason is twofold. They offer a personalized experience but have enough outlets in any given local market to be a convenient option for consumers. We also shouldn’t forget the progress of the 2>4 Store group. I did a year long investigation of Pet Stores 3 years ago to validate the numbers. I found that a large number of new independents entered the market, but over the course of the year, over 8% of existing indies “closed their doors”.

The chain stores, big and small, lost virtually no outlets. There is a lesson here, that is almost as old as humanity but also applies to retail pet stores. “There is safety in numbers!” It just takes 2 or maybe 5 or you could move up to 15. After that the sky is the limit! Chain stores began in the 90’s. The big guys will remain dominant but there is room for all sizes!

There is another classification of Pet Stores that has come more to the forefront….

Pet Store Franchises

Let’s take a closer look. These stores are either owned by the Franchisee or the Franchisor.

In 2017 their share of stores was:

• All Franchise Stores: 10.6%
• Franchisee owned: 6%
• Franchisor Owned: 4.0%

And their share of $ was:

• All Franchise Stores: 7.7%
• Franchisee Owned: 3.7%
• Franchisor Owned: 4.0%

About 1 in every 9 Pet Stores is a Franchise outlet but they take in only 1 of every 13 dollars spent at U.S. Pet Stores. Franchisee Owned lead the way in number of stores, but Franchisor Owned stores produce more $.

This is where they were at in 2017. Let’s take a look at how they got there by viewing the changes in key measurements from 2012 to 2017.

These are the same key measurements, just for groups most relevant to franchises, including their biggest competitor.

• Non-Franchise Chains – This is their biggest competitor and accounts for 40.9% of stores and 71.6% of Pet Store $.
  • Total $: $13.15B, +21.7%
  • # Stores: 4082, +33.2%
  • Avg $: $3.22M, -8.6%
  • # Employees: 79.8K, +10.6%
  • # Employ/Str: 19.5, -16.9%

Being on top creates a lot of pressure. They had a huge $ increase from opening more stores. Their percentage increase in $ was actually, even smaller than Indies, who closed 2.5% of their stores. They were the only group to have drops in Average Store $ and the number of employees per store.

• Total Franchise Stores – They gained ground in share of stores and $ but 1 subgroup was a bigger driver.
  • Total $: $1.42B, +72.5%
  • # Stores: 1063, +38.8%
  • Avg $: $1.33M, +24.3%
  • # Employees: 10.8K, +70.9%
  • # Employ/Str: 10.1, +23.1%

Their growth rate in stores and Total $ was basically triple that of the whole Pet Store channel. The growth rate for Average Store $ was slightly behind the rate for Indies but it was 70% higher in actual $. They also led the way in employee increases and broke the 10 employee per store “barrier”.

• Franchisee Owned Stores – Same name and business model, but different levels of execution from corporate stores.
  • Total $: $0.68B, +39.5%
  • # Stores: 660, +19.1%
  • Avg $: $1.04M, +17.1%
  • # Employees: 5.6K, +37.2%
  • # Employ/Str: 8.5, +15.2%

Although they lost some share to Franchisor Owned stores, they are still 62.1% of all Franchise Stores. They had significant growth in all measurements, but the store level execution of the Franchise business model can vary between stores producing a lower growth rate. In many ways the business behavior of these stores is more like that of an enhanced Independent Store. They have the 2^nd lowest Store $ and number of employees per store. Both these measurements are 30+ higher than Indies and 30+% lower than Franchisor Owned stores. The growth in stores is promoted and driven by the Corporation and the increase in store $ over an independent store likely comes from the impact of the store Brand name and the Franchise business model.

• Franchisor Owned Stores – These stores are classified as Franchises but essentially operate like a regular chain.
  • Total $: $0.73B, +120.9%
  • # Stores: 403, +90.1%
  • Avg $: $1.82M, +16.2%
  • # Employees: 5.2K, +132.2%
  • # Employ/Str: 12.9, +22.1%

Like the big regular chains, this group made a commitment to store growth. They increased the number of stores by an amazing 90%. This combined with a 16% increase in store $ produced a 121% increase in total $. Not to rain on their parade, but their average $ per store is still slightly below the $1.84M for Total Pet Stores and 43% lower than the $3.22M for Non-Franchise Chains. Their 22% growth in employees per store should also come with an (*). They have the lowest annual pay per employee for any group, even 29% below that for Indies, and it fell -6.8% between 2012 and 2017. It is likely that they have a high and growing percentage of part-time employees.

That wraps up our look at Franchised Pet Stores. We saw that Franchisee owned stores outperform Independent Stores, but Franchisor owned significantly outperformed them in store $ and growth. True performance is the share of $ divided by the share of stores. A score of 100+% means that a group is “earning their share”. Performance provides us a method to compare the subsets of Franchises to the subsets of store count. We will end our Pet Store analysis with this graph:

As expected, singles are the worst performers. If you’re considering opening a store, buying a franchise might offer more success. If you already have a successful store, should you open another? The answer appears to be yes. There is safety in numbers and greatly improved performance in the 2>4 group. Now comes the big question. Do you have the will and the resources to become a “force” in your local market? If so, then go for it. The 5>9 store group is 1 of only 2 groups performing above 100%. They even outperform the Franchisor owned group. The final step to 25+ stores is difficult and open to few. You first transition to 10>24 stores, where you learn the challenges of attaining regional success in possible anticipation of a national goal. That goal is truly “gold” as 25+ are the best performers and responsible for Pet Stores holding their ground in 2017 vs the Mass/Internet.

 

 

In May 2020, the Retail market began its recovery after hitting bottom in April. The road back has been long and complex and Consumer spending behavior continues to evolve. We have not beaten the virus yet so we will continue to track the ongoing recovery of the retail marketplace with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. 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 Retail Report for September and then move to the Advance Report for October. Remember, the retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress that the retail market has made towards a full recovery.

Both reports include the following:

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

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

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the September Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. $ fell in January & February but set a new $ record in March. In April $ fell but rebounded in May to another record high. Sales have slowly declined through September. Here are the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The final total is $1.7B more than the Advance report projected a month ago. All groups but Relevant Retail were up slightly. The specifics were: Relevant Retail: -$0.3B; Gas Stations: +$1.0B; Auto: +$0.8B: Restaurants: +$0.3B. Sales vs August were down in all groups. As you recall, Total Retail $ales broke $600B for the 1st time in December. Although September $ were slightly below December, they were still the 8^th highest of all time. Auto continues to have the strongest recovery with an annual YTD growth rate since 2019 of +11.8%. A spending dip in September is the “norm” in U.S. Retail. It is more important that for the 4th consecutive month, all groups were positive in all other measurements.

Now, let’s see how some Key Pet Relevant channels were doing in September.

• Overall – 10 of 11 channels were down vs August but all were up vs September 2020 and September 2019. In YTD $, all were up vs 2020 and 10 vs 2019. September was the 9th biggest month in history for Relevant Retail.
• Building Material Stores – Their amazing lift may finally be slowing. The surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Their Spring lift has slowed in 2021 but Building and Farm stores are still going strong. Sporting Goods stores have a similar spending pattern. Sales took off in May 2020, hit a record peak in December and continued strong into 2021, peaking in March. $ have slowed with a big drop in September, but YTD they are +47.7% vs 2019, an Annual Growth Rate of 21.5%!
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are down vs Aug. but YTD are on par with the 2020 binge. They are up 19.5% vs Sept. 2019 and 14.9% vs YTD 2019. Drug Stores were +$17B (+5.7%) for 2020. They had a record March. Sales have been stable since then, but all other measurements are positive and YTD $ are +7.6%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. Monthly sales by channel have been slightly up or down since then but GM has been strong, +15% YTD. $ Stores & Clubs/SuperCtrs are leading the way with a combined annual growth rate of +8.8%. These channels promote value. Their success reinforces its importance to consumers. Disc. Dept. Strs $ fell 11.5%, but that’s much better than -19% in 2019.
• Office, Gift & Souvenir Stores– $ fell from August but were +22.3% vs September 2020. The pandemic hit them hard. They are still down YTD vs 2019. Recovery is still a long way off, but their situation is improving.
• Internet/Mail Order – Even their $ were down vs August but the pandemic continues to foster this channel’s growth. In September of 2019, their YTD growth was +14.1%. Now, their avg growth rate is +19.6% – up 39.0%
• A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 total sales were up +11.6%. September was their 3^rd biggest month, and they had the only increase from August. YTD $ are +27.4% vs 2020 and +40.5% vs 2019.

Relevant Retail began recovery in May and set a $ record in December. $ fell in Jan & Feb, turned up again in March and began a monthly up/down rollercoaster. September $ are down but all but 1 channel are ahead of all 2020 & 2019 $. The key drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, the Advance numbers for October.

2020 was a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell from their December peak in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record of $633B. April sales were down slightly but they took off again in May to set yet another spending record, $643.1B. June>Sept $ fell but then came back in October with the 3rd biggest $ month in history. All major groups were up from September and were positive in all other measurements for the 5th straight month. Some other areas of the economy are still suffering, some spending behavior has changed, and inflation has become a bigger factor in increases. However, consumers continue to spend “big bucks”, especially in Relevant Retail, and the overall Retail marketplace continues its strong recovery.

Total Retail – In March, Total Retail was $633.1B, a new record. In April, $ales dipped to $625.5B but were still $218.3B more than April 2020 – a record increase, more than double the size of last year’s record drop. In May, sales set another new record, $643.1B. June>Sept sales dipped slightly but stayed above $600B. October brought a resurgence with monthly sales of $634.6B, the 3^rd biggest month in history. Moreover, the current YTD average annual sales growth rate since 2019 is 9.3%, the highest ever in records going back to 1992. INFLATION NOTE: Retail $ were +14.7% vs October 2020. Inflation was +6.2% so up to 42% of the lift came just from higher prices. The “Real” increase was +8.5%. In October 2019 (pre-pandemic) Retail $ were +3.7% over 2018. Inflation was 1.8%, 48% of the lift. This produced a “Real” increase of +1.9%. Long term, strong inflation can slow spending but right now, Retail is outperforming pre-COVID 2019.

Restaurants – This group has no negative measurements vs 2020 or 2019 for 5 straight months. February 2020 YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1B, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 started off slowly. Through February, YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and grew steadily from April through July. Sales dipped slightly in August/September but came back strong in October. YTD their $ are +30.4% vs 2020 and +5.0% vs 2019. Their recovery is getting stronger.

Auto (Motor Vehicle & Parts Dealers) – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March and has slowed only slightly from April>October as sales exceeded $123B in all 8 months – the 8 biggest months in history. To show the effectiveness of their campaign, just look at the data. This group has exceeded $110B in monthly sales only 17 times in history. 14 of those occurred after the onset of the pandemic.  YTD Avg Annual Growth Since 2019 = +11.6% – the best performance of any big group.

Gas Stations – Gas Station $ales have been a mixed bag. If you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed and continued to grow to to a record $53.5B in July. They fell in Aug/Sept but turned up in October. They have been positive in all measurements vs 2019 & 2020 since March. Their comeback continues but inflation comes to the forefront in this channel. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but then returned to more normal levels for the balance of 2020. They began strongly inflating in 2021. In fact, October 2021 prices were 49.6% above 2020. That means that the 45.3% year over year $ lift in October was actually a decrease in the amount of gas sold. YTD Annual Growth Rate Since 2019 = +6.0%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. In looking at the individual channels in this group, we have seen a variety of results due to many factors, like non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December. They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February 2021 but set monthly records. In March they turned sharply up and then began an up/down $ roller coaster ride. In October they reached the 2^nd highest amount on record. We should also note that while December 2020 is still #1, March>October are 8 of the 10 highest $ months of all time. Relevant Retail has exceeded $361B in monthly sales 10 times in history. 9 of those have occurred since the onset of the pandemic. It is also very important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 is +10.4%. The recovery has become widespread as all channels have been positive in all measurements vs both 2020 and 2019 for 3 consecutive months. However, the primary drivers throughout the pandemic were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus an exceptionally long 2020 “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. October $ were up 5.0% from September and an increase occurred in all but one channel. Remember, the groups in the chart are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in 12 of 13 channels were up vs September but all were up vs October 2020, vs October 2019 and YTD vs 2020 and 2019. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +10.4%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 18 consecutive months. The group set an all-time record of $407B in December and finished 2020 +$260B vs 2019. 2021 started strong, with record sales in every month. March > Oct. were 8 of the 10 biggest of all time. Essential channels are still the primary drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift may be ending but consumers are still focused on their homes.
• SuperCtrs/Club/Value/$ Strs – They kept the GM channel strongly positive. Value is still a big consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales increased for all channels in October and all other numbers were also positive. Even Department Stores $ are growing increasingly positive. After dipping to +7.5% in February, the growth rate by Club/SuperCtr/$ stores held at about 8.8% and then moved up in October. These stores are still the key to this channel.

• YTD Avg Annual Growth: All GM = +7.9%; Dept Stores = +1.9%; Club/SuprCtr/$ = +9.1%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In June>Oct they beat 2020 $. The Health, Personal Care group finished 2020 at +1.8% but 2021 has been better. October was up 1.6% from September but YTD they are +10% vs both 2020 & 2019.

• YTD Avg Annual Growth: Grocery = +7.3%; Health/Drug Stores = +5.2%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > Oct have been spectacular for all these channels. The increase in Clothing vs October 2020 was less than usual but was still +22.7%. Only Furniture was down vs September, but all groups remained positive in all measurements vs 2020 or 2019 for the 8th consecutive month.

• YTD Avg Annual Growth: Clothing = +5.4%; Electronic/Appliance = +3.7%; Furniture = +10.0%

Building Material, Farm & Garden & Hardware – Their “Spring” lift which began in 2020 has slowed but they have greatly benefited from consumers focusing on their home needs. They finished 2020 +53B (+13.8%). Sales took off in March, set a record in April, but has since slowed and stabilized. They are still +13.6% YTD. Avg Annual Growth = +13.5%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021. Sales grew 1% vs September, but it was still good enough for the 10^th consecutive monthly record. October YTD they are +31.0% vs 2020. Avg Annual Growth = +17.1%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 -$1.0B, -0.7%. In March 2021 sales took off and reached the $14+B level in May and they have stayed there. Sales grew 8.0% to $15.7B in October, which set a new all time $ record and broke the $15B barrier. YTD sales are now +28.1% vs 2020 +27.1% vs 2019. Their recovery has become very real. YTD Avg Annual Growth = +12.7% (4^th Best)

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and every month in 2021 has produced record $. October was +6.1% vs September and +7.4% vs 2020. YTD $ are +14.2%. YTD Avg Annual Growth = +17.6%

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

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. 2021 may become even more memorable. March>October are 8 of the 9 biggest $ales months in history with the 8 largest year over year monthly sales increases ever. The total increase was +$945B, which is over 5 times the -$174B decrease from March>May 2020 which caused so much concern. At yearend 2020, Restaurants and Gas Stations were still struggling but Auto had largely recovered. Relevant retail had segments that also struggled but they still led the way for Total Spending to finish the year +0.5% vs 2019. 2021 has been even better. In June > October all major groups are positive vs both 2020 and 2019. The recovery has also become real for virtually all channels and monthly sales continue to set records. In fact, the current annual growth rates of +9.3% for Total retail and +10.4% for Relevant Retail are the best in history. Retail has recovered and continues to grow but we’ll keep checking.

In May 2020, the Retail market began its recovery after hitting bottom in April. The road back has been long and complex and Consumer spending behavior continues to evolve. Now, the virus is resurging so we will continue to track the impact on the recovery of the retail marketplace with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. 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 Retail Report for July and then move to the Advance Retail Report for August. Remember, the retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress that the retail market has made towards a full recovery.

Both reports include the following:

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

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

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the July Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. $ fell in January & February but they took off in March, setting a new all time $ record. In April $ fell but they rebounded in May to another record high. June & July saw more dips. Here are the major retail groups. (All Data is Actual, Not Seasonally Adjusted)

The final total is $3.3B less than the Advance report projected a month ago. All groups were down slightly. The specifics were: Relevant Retail: -$2.1B; Gas Stations: -$0.2B; Restaurants: -$0.4B; Auto: -$0.5B. Sales vs June were down in all but Gas Stations and Restaurants. Total Retail $ were the 3rd highest month of all time. Total $ales broke $600B for the 1st time in December and has now done it 7 times. Auto still has the strongest recovery and is in fact prospering – annual YTD growth rate since 2019 is +12.8%. Except for the spending dips vs June, for the second consecutive month all groups, including Restaurants, were positive in all other measurements.

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

• Overall– 7 of 11 channels were down vs June but all were up vs July 2020 and 10 vs July 2019. In YTD $, all were up vs 2020 and 10 vs 2019. July was the 6th biggest month in history for Relevant Retail.
• Building Material Stores – Their amazing lift may finally be slowing. The surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Their Spring lift has slowed in 2021 but Building and Farm stores are still going strong. Sporting Goods stores have a similar spending pattern. Sales took off in May 2020, hit a record peak in December and continued strong into 2021, peaking in March. July $ fell slightly from June. However, YTD they are +49.6% vs 2019. That’s an Annual Growth Rate of 22.3%!
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are up vs June but YTD are on par with the 2020 binge. They are still up 15.8% vs July 2019 and 14% vs YTD 2019. Drug Stores were +$17B (+5.7%) for 2020. They had a record March. Sales have fallen since then. However, all other measurements are positive and YTD $ are +7.2%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. In April, sales in all but $ stores declined but they bounced back in May. In June sales dipped for again for all. In July $ Stores dipped again but along with Clubs/SuperCtrs they are leading the way with a combined growth rate of +8.6%. These channels promote value. Their success reinforces its importance to consumers. Disc. Dept Strs are also back in the game.
• Office, Gift & Souvenir Stores– $ increased slightly from June and were +25% vs July 2020. The pandemic hit them hard. They are still down vs 2019 – monthly and YTD. Recovery is a long way off, but things are improving.
• Internet/Mail Order – Their $ fell slightly in July but the pandemic continues to foster this channel’s growth. In July of 2019, their YTD growth was +14.0%. Now, their avg growth rate is +19.6% – a 40.0% increase.
• A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 total sales were up +11.6%. Their July $ were down slightly from June but still #3 of all time. YTD sales are +28.2% vs 2020 and +39.5% vs 2019. Very strong!

Relevant Retail began recovery in May and reached a record level in December. $ fell in Jan & Feb, turned up again in March and began a monthly up/down rollercoaster. July $ are down but virtually all channels are showing growth. The key drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, the Advance numbers for August.

2020 was a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell from their December peak in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record of $633B. April sales were down slightly but they took off again in May to set yet another spending record, $643.1B. June>August $ fell but August was still the 5th biggest $ month in history. Auto, Gas Stations and Restaurants were down from July, but all the major groups were positive in all other measurements for the third straight month. Some other areas of the economy are still suffering, some spending behavior has changed, and inflation has become a factor in some increases. However, consumers continue to spend “big bucks”, especially in Relevant Retail, and the overall Retail marketplace continues its strong recovery.

Total Retail – In March, Total Retail hit $633.1B, a record for the most spending in any month in any year. In April, $ales dipped to $625.5B but were still $218.3B more than April 2020 – a record increase that was more than double the size of last year’s record drop. In May, sales set another new record, $643.1B. June>August sales dipped slightly but August was $629.1B, the 5th biggest month in history. Moreover, the current YTD average annual sales growth rate since 2019 is 9.0%, the highest ever in records going back to 1992. Total Retail has not just recovered. It is stronger than ever.

Restaurants – This group has no negative measurements vs 2020 or 2019 for 3 straight months. Last February YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 started off slowly. Through February, YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and grew steadily from April Through July. Sales dipped slightly in August but were still strong vs 2019 & 2020. YTD their $ are plus 30.6% vs 2020 and +3.1% vs 2019. Their recovery is getting stronger.

Auto (Motor Vehicle & Parts Dealers)   – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March and slowed only slightly in April>August as sales exceeded $127B in all 6 months – the 6 biggest months in history. To show how well consumers responded to their campaign you just need to look at the data. This group has exceeded $110B in monthly sales only 15 times in history. 12 of those occurred after the onset of the pandemic.  YTD Avg Annual Growth Since 2019 = +11.8% – the best performance of any big group.

Gas Stations – Gas Station $ales have been a mixed bag. If you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed and continued to grow in April > July to a record $53.5B. They fell in August but are still +36% from 2020. They have been positive in all measurements vs 2019 & 2020 since March. Their comeback continues but there is another factor that must be considered – inflation. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but then returned to more normal levels for the balance of 2020. They began strongly inflating in 2021. In fact, the August 2021 prices were 42.7% above 2020. That means that the 36.2% year over year $ lift in August was actually a decrease in the amount of gas sold. YTD Annual Avg Growth Rate Since 2019 = +4.5%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. When you look at the individual channels in this group, you see a variety of results due to many factors – non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December ($407B). They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February but set monthly records. In March they turned sharply up and then down in April. They bounced back in May then fell in June & July. In August sales rose again and it was the 5^th largest month on record. We should also note that that while December 2020 is still #1, March > August are six of the eight highest $ months of all time. The Relevant Retail Market has exceeded $366B in monthly sales 8 tImes in history. 7 of those have occurred since the onset of the pandemic. It is also very important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 now stands at +10.1%. In August Department Stores “got on board” so all channels are now positive in all measurements vs both 2020 and 2019. However, the primary drivers throughout the pandemic were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus an exceptionally long 2020 “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. August $ were up slightly from July but none of the increases were “off the charts”. However, it was still the 5^th largest month in history for Relevant Retail outlets. The groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in only 4 of 13 channels were down vs July but all were up vs August 2020, vs August 2019 and YTD vs 2020 and 2019. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +10.1%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 16 consecutive months. The group set an all-time record of $407B in December and finished 2020 +$260B vs 2019. 2021 started strong, with record sales in every month. March > August were 6 of the 8 biggest of all time. Essential channels are still the primary drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift may be ending but consumers are still focused on their homes.
• SuperCtrs/Club/Value/$ Strs – They kept the GM channel strongly positive. Value is still a big consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales rose in August and all other numbers are positive. Even Department Stores $ are now finally all positive. After dipping to +7.5% in February, the growth rate by Club/SuperCtr/$ stores has remained near the current 8.5%. These stores are still the key to this channel.

• YTD Avg Annual Growth: All GM = +7.1%; Dept Stores = +0.4%; Club/SuprCtr/$ = +8.5%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In June>August they beat 2020 $. The Health, Personal Care group finished 2020 at +1.8%. 2021 has started even better. August was up +0.4% and YTD they are +10.1% vs 2020 and 2019.

• YTD Avg Annual Growth: Grocery = +6.8%; Health/Drug Stores = +4.9%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > August have been spectacular for all these channels. The increase in Clothing vs August 2020 was not “off the chart” but was still +36.6%. All of these groups were up vs July and they remained positive in all measurements vs 2020 or 2019 for the 6th consecutive month.

• YTD Avg Annual Growth: Clothing = +4.7%; Electronic/Appliance = +3.5%; Furniture = +10.3%

Building Material, Farm & Garden & Hardware – Their Spring lift began on time in 2020 but may be finally slowing. They have greatly benefited from consumers focusing on their home needs. They finished 2020 +53B (+13.8%). Sales took off in March, set a record in April then trended down May > August. They are still +15.4% YTD. Avg Annual Growth = +13.6%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021. January > August set monthly records and August was the 2^nd biggest month in history. August YTD they are +36.1% vs 2020. Avg Annual Growth = +17.0%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 -$1.0B, -0.7%. In March sales took off and reached the $14+B level in May and they have stayed there. Sales fell -2.0% in August but their YTD sales are now 28.4% above 2020 and 25.0% more than 2019. Their recovery has become very real. YTD Avg Annual Growth = +11.8% (4^th Best)

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and every month in 2021 has produced record $. August was +5.9% vs July and +10.6% vs 2020. Their YTD $ are +15.7%. YTD Avg Annual Growth = +17.8%

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

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. 2021 may become even more memorable. March>August became the 6 biggest $ales months in history with the 6 largest year over year monthly sales increases ever. The total increase was +$783B, which totally dwarfs the -$174B decrease from March>May 2020 which caused so much concern. At yearend 2020, Restaurants and Gas Stations were still struggling but Auto had largely recovered. Relevant retail had segments that also struggled but overall, they led the way for Total Spending to finish the year +0.5% vs 2019. 2021 has grown even more positive. In June > August all major groups are positive vs both 2020 and 2019. The details show that the recovery in Relevant retail has become real for virtually all channels and monthly sales continue to set records. Retail has recovered and so far the resurgence of COVID has not negatively impacted Retail. We’ll keep checking.

 

In May 2020, the Retail market began its recovery after hitting bottom in April. The road back has been long and complex and Consumer spending behavior continues to evolve. Now, the virus is resurging so we will continue to track the impact on the recovery of the retail marketplace with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. 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 Retail Report for June and then move to the Advance Retail Report for July. Remember, the retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress that the retail market has made towards a full recovery.

Both reports include the following:

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

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

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the June Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. $ fell in January & February but they took off in March, setting a new all time $ record. In April $ fell but they rebounded in May to another record high. Now, in June another $ dip. Here are the major retail groups. (All Data is Actual, Not Seasonally Adjusted)

The final total is $3.5B more than the Advance report projected a month ago. All groups but Auto were up slightly. The specifics were: Relevant Retail: +$2.3B; Gas Stations: $1.4B; Restaurants: +$0.1B; Auto: -$0.3B. Sales vs May were down in all but Gas Stations and Total Retail $ were the 2^nd highest month of all time. Total $ales broke $600B for the 1st time in December and has now done it 5 times. Auto still has the strongest recovery and is in fact prospering – annual YTD growth rate since 2019 is +13.1%. Except for the spending dips vs May, for the first time since the recovery began, all groups, including Restaurants, were positive in all other measurements.

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

• Overall– 6 of 11 channels were down vs May but all were up vs May 2020 and 10 vs May 2019. In YTD $, 10 were up vs 2020 and 10 vs 2019. 9 were up vs both. June was the 5th biggest month in history for Relevant Retail.
• Building Material Stores – Their amazing lift continues. The ongoing surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Their Spring lift has slowed but Building and Farm stores are still going strong. Sporting Goods stores have a similar spending pattern. Sales took off in May 2020, hit a record peak in December and continued strong into 2021, peaking in March. April & May $ fell slightly but rebounded in June. YTD they are +51% vs 2019. That’s an Annual Growth Rate of 22.9%!
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are down vs May but YTD are on par with the 2020 binge. They are still up 15% vs June 2019 and 14% vs YTD 2019. Drug Stores were +$17B (+5.7%) for 2020. Their $ rose in June after monthly declines from a record March. Now all measurements are positive and YTD $ are +7.4%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. In April, sales in all but $ stores declined but they bounced back in May. In June, sales dipped for all but they are going strong. $ Stores and Clubs/SuperCtrs are leading the way with a combined annual growth rate of +8.4%. These channels promote value. Their success vs both 2020 and 2019 reinforces its importance in Consumer spending decisions.
• Office, Gift & Souvenir Stores– $ increased slightly from May and were +41.6% vs June 2020. The pandemic hit them hard. They are still down vs 2019 – monthly and YTD. Recovery is a long way off, but things are improving.
• Internet/Mail Order – Their $ increased slightly in June as the pandemic continues to foster this channel’s growth. In June of 2019, their YTD growth was +13.3%. Now, their avg growth rate is +20.6% – a 54.6% increase.
• A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 total sales were up +11.6%. Their June $ were up slightly from May and another all-time record. YTD sales are +30.5% vs 2020 and +39.3% vs 2019. Very strong!

Relevant Retail began recovery in May and reached a record level in December. $ fell in Jan & Feb, turned up again in March and began a monthly up/down rollercoaster. June $ are down but virtually all channels are showing growth. The key drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, here are the Advance numbers for July.

2020 was a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell from their December peak in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record of $633B. April sales were down slightly but they took off again in May to set yet another spending record, $641.5B. June $ fell but the rollercoaster ride continued as July $ bounced back to become the 2^nd biggest $ month in history. Auto and Relevant Retail, the leaders of the recovery, were down from June but all the major groups were positive in all other measurements for the second straight month. Some other areas of the economy are still suffering, some spending behavior has changed, and inflation has become a factor in some increases. However, consumers continue to spend “big bucks” and the overall Retail marketplace has strongly recovered.

Total Retail – In March, Total Retail hit $633.1B, a record for the most spending in any month in any year. In April, $ales dipped to $625.5B but were still $218.3B more than April 2020 – a record increase that was more than double the size of last year’s record drop. In May, sales set another new record, $641.5B. In June sales dipped slightly but rebounded in July to $637.0B, the 2^nd biggest month in history. Moreover, the current YTD average annual sales growth rate since 2019 is 9.2%, the highest ever in records going back to 1992. Total Retail has not just recovered. It is stronger than ever.

Restaurants – This group has no negative measurements vs 2020 or 2019 for 2 straight months. Last February YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 started off slowly. Through February, YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and grew steadily in April and May. Sales dipped slightly in June but were still strong vs 2019 & 2020. In July the $ turned up. YTD their $ are plus 30.5% vs 2020 and +2.4% vs 2019. Their recovery is getting stronger.

Auto (Motor Vehicle & Parts Dealers)   – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March and slowed only slightly in April>July as sales exceeded $134B in all 5 months, by far the 5 biggest months in history. To show how well consumers responded to their campaign you just need to look at the data. This group has exceeded $110B in monthly sales only 13 times in history. 11 of those occurred after the onset of the pandemic.  YTD Avg Annual Growth Since 2019 = +12.8% – the best performance of any big group.

Gas Stations – Gas Station $ales have been a mixed bag. If you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed and continued to grow in April > July to a record $53.7B, 38.1% above July 2020. They have been positive in all measurements vs both 2019 and 2020 since March. Their comeback continues but there is another factor that must be considered – inflation. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but then returned to more normal levels for the balance of 2020. They began strongly inflating in 2021. In fact, the July 2021 prices were 41.8% above July 2020. That means that the 38.1% year over year $ lift in July was actually a decrease in the amount of gas sold. YTD Annual Avg Growth Rate Since 2019 = +4.2%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. When you look at the individual channels in this group, you see a variety of results due to many factors – non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December ($407B). They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February but set monthly records. In March they turned sharply up and then down in April. They bounced back in May then fell in June. July was down slightly from June, -$1.5B (-0.4%) but was still the biggest July ever and the 6^th largest month on record. We should also note that that while December 2020 is still #1, March > July are five of the seven highest $ months of all time. The Relevant Retail Market has exceeded $366B in monthly sales 7 tImes in history. 6 of those have occurred since the onset of the pandemic. It is also very important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 now stands at +10.3%. Through July all but Department Stores continue to be positive in all measurements vs both 2020 and 2019. However, the primary drivers throughout the pandemic were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus never ending “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. July $ were down slightly from June and none of the increases were “off the charts”. However, it was still the 6^th largest month in history for Relevant Retail outlets. The groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in only 4 of 13 channels were down vs June but all were up vs July 2020, vs July 2019 and YTD vs 2020. Only 1 was down YTD vs 2019 and they were only -0.1%. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +10.3%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 15 consecutive months. The group set an all-time record of $407B in December and finished 2020 +$260B vs 2019. 2021 started strong, with record sales in every month. March > July were 5 of the 7 biggest of all time. Essential channels are still the primary drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift continues unabated as consumers focus on their home.
• SuperCtrs/Club/Value/$ Strs – They keep the GM channel positive. Value is still a major consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales rose in July and all other numbers are positive. YTD Department Stores $ remain up vs 2020 but are down -0.1% vs 2019. Their problems began before the Pandemic. After dipping to +7.5% in February, the growth rate by Club/SuperCtr/$ stores has remained near the current 8.6%. These stores are still the key to this channel.

• YTD Avg Annual Growth: All GM = +7.1%; Dept Stores = -0.07%; Club/SuprCtr/$ = +8.6%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In June/July they beat 2020 $. The Health, Personal Care group finished 2020 at +1.8%. 2021 has started even better. Although July was down -1.0%, YTD they are +10.2% vs 2020 and +9.9% vs 2019.

• YTD Avg Annual Growth: Grocery = +6.9%; Health/Drug Stores = +4.9%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > July have been spectacular for all these channels. The increase in Clothing vs July 2020 was not “off the chart” but was still +45.8%. All of these groups were up vs June and they remained positive in all measurements vs 2020 or 2019 for the 5th consecutive month.

• YTD Avg Annual Growth: Clothing = +4.8%; Electronic/Appliance = +3.6%; Furniture = +10.2%

Building Material, Farm & Garden & Hardware – Their Spring lift began on time in 2020 and has never stopped. They have greatly benefited from consumers focusing on their home needs. They finished 2020 +53B (+13.8%). Sales took off in March, set a record in April then trended down May > July. They are still +16.4% YTD. Avg Annual Growth = +14.1%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021. January > July set monthly records and March had the most $ of any non-December month in history. July YTD they are +39.0% vs 2020. Avg Annual Growth = +17.5%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 -$1.0B, -0.7%. In March sales took off and the channel set a new all-time monthly record of $14.39B in May. However, they beat that record in June with $14.41B and now July with $14.65B. Their YTD sales are now 36.2% above 2020 and 26.0% more than 2019. Their recovery has become very real. YTD Avg Annual Growth = +12.2% (4^th Best)

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and every month in 2021 has produced record $. July was -3.7% vs June but still +3.7% vs 2020. Their YTD $ are +16.9%. YTD Avg Annual Growth = +18.0%

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

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. 2021 may become even more memorable. March>July became the 5 biggest $ales months in history with the 5 largest year over year monthly sales increases ever. The total increase was +$701B, which totally dwarfs the -$174B decrease from March>May 2020 which caused so much concern. At yearend 2020, Restaurants, Auto and Gas Stations were still struggling but Auto had largely recovered. Relevant retail had segments that also struggled but overall, they led the way for Total Spending to finish the year +0.5% vs 2019. 2021 has grown even more positive. In June and now July, all major groups, including Restaurants are positive vs both 2020 and 2019. The details show that the recovery in Relevant retail has become real for virtually all channels and monthly sales continue to set records. Retail has recovered so the question is, “Will the resurgence of COVID negatively impact Retail?”

In May 2020  the Retail market began its recovery after hitting bottom in April. The road back has been long and complex and Consumer spending behavior continues to evolve. In this report we will track the changes, migration between channels and the retail recovery with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. 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 Retail Report for May and then move to the Advance Retail Report for June. Remember, the retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress that the retail market has made towards a full recovery.

Both reports include the following:

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

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

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the May Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. In January & February $ fell but they skyrocketed in March, setting a new all time $ record. In April $ fell a bit but they rebounded in May to yet another record high. Here are the major retail groups. (All Data is Actual, Not Seasonally Adjusted)

The final total is $2.9B less than the Advance report projected a month ago. All groups but Restaurants were down slightly. The specifics were: Relevant Retail: -$2.2B Auto: -$1.1B; Restaurants: +$1.2B; Gas Stations: -$0.8B. Sales vs April were up in all but Auto and Total Retail $ set a new all-time record. Total $ales broke $600B for the 1st time in December and has now done it 4 times. Auto has the strongest recovery and is in fact prospering – annual YTD growth rate since 2019 is +12.9%. Except for the spending dip by Auto vs April, all but Restaurants were positive in all other measurements. Restaurants are still slightly negative vs 2019 but the Retail recovery is strong.

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

• Overall– 7 of 11 channels were down vs April but 10 were up vs May 2020 and 10 vs May 2019. In YTD $, 10 were up vs 2020 and 10 vs 2019. 9 were up vs both. May was the 3^rd biggest month in history for Relevant Retail.
• Building Material Stores – Their amazing lift continues. The ongoing surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Now we’re into the 2021 Spring lift for both Building and Farm stores . Sporting Goods stores are not in this group but have a similar spending pattern. Sales took off in May, hit a record peak in December and continued strong into 2021, peaking in March. May $ fell slightly again but are +30.6% vs 2020 and +49.5% vs 2019. YTD they are still +53% vs 2019.
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are down vs April and YTD 2020 due to last year’s binge buying. They are still up 14% vs May 2019 and YTD 2019. Drug Stores ended up +$17B (+5.7%) for 2020. Their $ fell in April and May after a setting a record in March. All other measurements are positive and YTD $ are +7.2%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. In April, sales in all but $ stores declined but they bounced back in May. Discount Store were having problems before the pandemic, but they have strongly recovered, +8.5% YTD vs 2019. Clubs/SuperCtrs and $ Stores remain strong. These channels promote value. Their success vs both 2020 and 2019 reinforces its importance in Consumer spending decisions.
• Office, Gift & Souvenir Stores– $ increased slightly from April and were +79% vs May 2020. The pandemic hit them hard. They are still down vs 2019 – monthly and YTD. Recovery is a long way off, but things are improving.
• Internet/Mail Order – Although $ dropped again in May the pandemic continues to foster this channel’s growth. In May of 2019, their YTD growth rate was +13.0%. In May 2021, it is +20.4% – a 56.4% increase.
• A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 total sales were up +11.6%. Their May $ hit $10B for the 1^st time to set a new all-time record. YTD sales are +32.7% vs 2020 and +38.6% vs 2019. Very strong!

The Relevant Retail Segment began recovery in May, reached a record level in December, then $ fell in Jan & Feb. Sales turned up again in March, fell slightly in April then bounced back in May. Almost all channels are showing growth. The key drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm.

Now, here are the Advance numbers for June.

2020 was a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell from their December peak in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record of $633B. April sales were down slightly but they took off again in May to set yet another spending record, $641.5B. June brought another slight dip in this rollercoaster ride but was still the 3^rd biggest $ month in history. All but Gas Stations were down vs May, but all the major groups were positive in all other measurements. The big news is that for the 1^st time YTD Restaurant $ were positive versus 2019 – just barely, +0.1%. Some other areas of the economy are still suffering, some spending behavior has changed and inflation has become a factor in some increases. However, consumers are back spending money and the overall Retail marketplace has strongly recovered.

Total Retail – In March, Total Retail hit $633.1B, a record for the most spending in any month in any year. In April, $ales dipped to $625.5B but were still $218.3B more than April 2020 – a record increase, which was more than double the size of last year’s record drop. In May, sales set another new record, $641.5B. In June sales dipped slightly to $631.1B, but it was still the 3^rd biggest month in history. Moreover, the current YTD average annual sales growth rate since 2019 is 9.0%, the strongest ever in records going back to 1992. Total Retail has not just recovered. It is stronger than ever.

Restaurants – This group finally has no negative measurements vs 2020 or 2019. Last February YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 started off slowly. Through February, YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and grew steadily in April and May. Sales dipped slightly in June but were still strong vs 2019 & 2020. YTD their $ are ahead of 2020 and exceeded 2019 by 0.5B (+0.1%). Their recovery is gaining strength.

Auto (Motor Vehicle & Parts Dealers)   – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March and slowed only slightly in April>June as sales exceeded $137B in all 4 months, by far the 4 biggest months in history. To show how well consumers responded to their campaign you just need to look at the data. This group has exceeded $110B in monthly sales only 12 times in history. 10 of those occurred after the onset of the pandemic.  YTD Avg Annual Growth Since 2019 = +13.2% – the best performance of any big group.

Gas Stations – Gas Station $ales have been a mixed bag. If you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed. They increased slightly in April, May and June and were 37.4% above June 2020. They have been positive in all measurements vs both 2019 and 2020 since March. Their comeback continues but there is another factor that must be considered – inflation. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but then returned to more normal levels for the balance of 2020. They began strongly inflating in 2021. In fact, the June 2021 prices were 45% above June 2020. That means that the 37.4% year over year $ lift in June was actually a decrease in the amount of gas sold. YTD Annual Avg Growth Rate Since 2019 = +3.1%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. When you look at the individual channels in this group, you see a variety of results due to many factors – non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December ($407B). They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February but set monthly records. In March they turned sharply up again, then dipped slightly in April but May brought the 3rd highest $ of all time. June saw another slight $ decline but they are still up $40.8B, +12.3% vs June 2020 and  +$298.8B, +16.5% YTD. We should note that that while December 2020 is still #1, March ($374.7B), April ($366.8B), May ($376.7B) and June ($371.5B) of 2021 are four of the six highest monthly totals of all time. It is also important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 now stands at +10.2%. Through June all but one channel have now turned positive in all measurements vs both 2020 and 2019. However, the primary drivers throughout the pandemic were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus a seemingly never ending “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. June $ were down slightly from May and none of the increases were “off the charts”. However, it was still the 5^th largest month in history for Relevant Retail outlets. The groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in 7 of 13 channels were down vs May but all were up vs June 2020, vs June 2019 and YTD vs 2020. Only 1 was down YTD vs 2019. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +10.2%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 14 consecutive months. The group set an all-time record of $407B in December and finished 2020 +$260B vs 2019. 2021 started strong, with record sales in every month. March > June were 4 of the 6 biggest of all time. Essential channels are still the primary drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift continues unabated as consumers focus on their home.
• SuperCtrs/Club/Value/$ Strs – They keep the GM channel positive. Value is still a major consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales fell in June but all other numbers are positive. YTD Department Stores $ remain up vs 2020 but down vs 2019. They were having problems before the Pandemic. After dipping to +7.5% in February, the growth rate by Club/SuperCtr/$ stores has remained near the current 8.4%. These stores are still the key to this channel.

• YTD Avg Annual Growth: All GM = +6.8%; Dept Stores = -0.9%; Club/SuprCtr/$ = +8.4%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In June they beat 2020 $. The Health, Personal Care group finished 2020 at +1.8%. 2021 has started even better. With strong March > June sales, YTD they are +10.7% vs 2020 and +9.5% vs 2019.

• YTD Avg Annual Growth: Grocery = +6.7%; Health/Drug Stores = +4.6%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > June have been spectacular for all these channels. The increase in Clothing Stores vs June 2020 was not “off the chart” but was still +49.4%. Although all of these groups were down vs May they remain positive in all measurements vs 2020 or 2019 for the 4th consecutive month.

• YTD Avg Annual Growth: Clothing = +3.6%; Electronic/Appliance = +2.5%; Furniture = +10.1%

Building Material, Farm & Garden & Hardware – Their Spring lift began on time in 2020 and has never stopped. They have greatly benefited from consumers focusing on their home needs. They finished 2020 +53B (+13.8%). Sales took off in March, set a record in April then dipped slightly in May & June. They are +18.3% YTD. Avg Annual Growth = +14.6%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021. January > June set monthly records and March had the most $ of any non-December month in history. June YTD they are +44.6% vs 2020. Avg Annual Growth = +17.5%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 down $1.0B, -0.7%. In March sales took off and the channel set a new all-time monthly record of $14.39B in May. However, they beat that record in June with $14.41B. Their YTD sales are now 31.9% above 2020 and 25.1% more than 2019. Their recovery has become very real. YTD Avg Annual Growth = +11.9%

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and every month in 2021 has produced record $. June was +2.0% vs May and +12.0% vs 2020. Their YTD $ are +19.1%. YTD Avg Annual Growth = +18.5%

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

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. 2021 may become even more memorable. March>June became the 4 biggest Retail $ales months in history with the 4 largest year over year monthly sales increases ever. The total increase was +$608B, almost quadruple (3.87 times) the -$157B decrease from March>June 2020. At yearend 2020, Restaurants, Auto and Gas Stations were still struggling but Auto had largely recovered. Relevant retail had segments that also struggled but overall, they led the way for Total Spending to finish the year +0.5% vs 2019. 2021 has grown even more positive. The Auto Segment is setting sales records. Gas Stations, with help from inflation, is all positive vs 2020 and 2019 and thanks to a great June, so are Restaurants. The details show that the recovery in Relevant retail has become real for virtually all channels and monthly sales continue to set records. Retail has recovered but one question remains, “How high can the $ go?”