Retail Channel $ Update – August Monthly & September Advance

In September, the Commodities inflation CPI rose to 1.9% from 1.3% and Total Retail sales were +5.7% vs 24, 22% above their avg September Lift. The Relevant Retail CPI rose to 1.8% from 1.6% and sales were +5.0% vs 24, 8.5% above avg. There are other factors impacting sales, including high cumulative inflation and pre-tarifflation binge buying. It is a complex situation. The problem with YOY drops and the size of sales lifts is better but still a real concern.

We’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI. The 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 July Monthly Report and then go to the August Advance Report. Our focus is comparing to last year but also 21 & 19. 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 August Monthly. Only 2 were up from July but there were only 2 actual YOY sales drops, Gas Stations vs 24. Note: They are still selling more product than in 2019. 4 groups are now “all positive”, up from 3 in Mar>Jul. Relevant Retail has been all positive in 18 of the last 22 months and in 14 of the last 16. ($ are Not Seasonally Adjusted)

The August Monthly is $0.1B less than the Advance report. Restaurants: +$0.5B; Auto: +$0.1B; Gas Stations: No Chge; Relevant Retail: -$0.8B. Only Restaurants & Auto were up from July. A Jul>Aug decrease in Total Retail has only happened in 6 of the years since 1992 and the -0.04% drop was far below the -2.2% avg. There were only 2 YOY drops in actual sales, the same as Mar>Jul. There were no “real” sales drops, down from 1 in Jul, 2 less than May/Jun & way down from 4 in Apr & 5 in Mar. 4 groups were “all positive”, (3 in Mar>Jul). Restaurants still have the biggest increases vs 21 & 19 but Relevant Retl stayed at the top of “real” performance vs 2019. However, only 53% of their growth is real.

Now, let’s see how some Key Pet Relevant channels did in August (83% of Aug Ytd Rel Retl $)

Overall– 6 of 11 were down from July. Vs Aug 24, 8 were actually & 6 “really” up. Vs Aug 21, 9 were up but only 6 were real increases. Vs 2019, Only Dept Strs & Off/Gift/Souv were actually & really down.

Building Material Stores – The pandemic focus on home has produced sales growth of 29.2% since 2019. Prices for the Bldg/Matl group have inflated 20.3% from 21 and 23.5% from 2019 which is having an impact. Sales vs July were -6.0% for HomeCtr/Hdwe and -12.7% for Farm Stores. Vs other years, Farm stores are actually up for all, but Home Center/Hardware are only actually up vs Aug 21 & 2019. They are really down for all but vs 2019. Farm stores are only really up Ytd vs 24 & 19. Plus, only 16% of the Bldg Materials group’s 19>25 lift was real. Avg 19>25 Growth: HomeCtr/Hdwe: 4.0%, Real: 0.4%; Farm: 6.3%, Real: 2.6%
Food & Drug – Both are essential. Except for the pandemic food binge buying, they tend to have smaller changes in $. Vs July: Supermarkets: +0.1%; Drug: -1.3%. In terms of inflation, the Groceries rate is over 60 times higher than Drug/Med products. Drug Stores are positive in all measurements and 69% of their 2019>25 growth is real. Supermarkets’ actual $ are up in all comparisons. They are only “really” down monthly and Ytd vs 2021. However, only 8.5% of their 19>25 increase is real growth. Avg 19>25 Growth: Supermarkets: +4.9%, Real: +0.5%; Drug Stores: +5.6%, 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 up 8.1% from July and their only negatives are actual Ytd vs 2024 and actual/real ytd vs 21. Prices are still deflating, -1.3% vs 24. Deflation started in April 23 and is a big change from +1.1% in 22>23 & +7.9% in 21>22. This caused 68% of their 31% lift since 19 to be real. Avg 19>25 Growth is: +4.6%; Real: +3.3%.
Gen Mdse Stores – Sales were +4.5% vs July, all YOY sales – actual & real were up for Club/SupCtrs. $ Stores were only really down vs Aug 24. Department Stores are negative in all comparisons. Their Actual sales are even -30.6% from 19 (Real: -37.2%). The other channels have an average of 42.5% in real growth. Avg 19>25 Growth: SupCtr/Club: 5.1%, Real: 2.3%; $/Value Strs: +5.4%, Real: +2.6%; Dept. Strs: -5.9%, Real: -7.5%.
Office, Gift & Souvenir Stores – Sales fell slightly from July, -2.5%, only -$0.1B. They are only actually up Ytd vs 24 & 21, but they are only ‘really’ up Ytd vs 24. Their recovery started late. It was slowly restarting in Jun/Jul, but their progress has slowed. Actual Sales once again are down vs 2019. Avg Growth Rate: -0.01%, Real: -1.7%
Internet/Mail Order – Sales are -4.6% from July to $115.5B, but still the highest August $ ever. All YOY measurements are positive, but their YOY growth, +7.1%, is only 49% of their average since 2019. However, 82.8% of their 124.9% growth since 2019 is real. Avg Growth: +14.5%, Real: +12.6%. As expected, they are by far the growth leader since 2019.
A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached $100B for the first time in 2021. In 2022 their sales dipped in Jan, Jul, Sep>Nov, rose in Dec, fell in Jan>Feb 23, grew Mar>May, fell Jun>Aug, rose Sep>Nov, fell Dec>Jan 24, grew Feb>May, fell Jun>Sep, grew Oct, fell Nov, rose Dec, fell Jan>Feb, grew Mar>May, then fell Jun>Aug. All comparisons are again positive, and they are in 2^nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 77% of their 69.7% growth since 2019 is real. Average 19>25 Growth: 9.2%, Real: +7.4%

August had a small drop vs July. Only 2 Big groups were up & 6 of 11 smaller channels were down. The YOY Aug lift vs 24 was 3.5% for Total & Relevant Retl, about 25% below avg for both. Prices are only deflating in 1 channel (the same as July) but cumulative inflation still impacts sales as only 6 channels were ‘really’ up vs Aug 21. The Retail Recovery has slowed but continues. The August commodities CPI of 1.3% rose to 1.9% in September. Let’s see if it impacts Retail.

Aug>Sep sales were down for all. An Aug>Sep Total Retail drop has happened every year since 1992 but the -4.9% drop is 21% less than the -6.2% avg change. There was 1 YOY $ drop, 1 less than Apr>Aug. $ for all Big Groups were up vs Sep 24 and the Total Retail lift of 5.7% vs Sep 24 was 22% above their +4.7% 92>24 avg. The Relevant Retail 5.0% increase vs Sep 24 was only 8.5% above their +4.6% avg. Inflation is still a factor. The CPI for all commodities rose to 1.9% from 1.3% but it stayed 11.8% vs 21. There is also some good “real” news. No “real” measurement was down, the same as Aug, but down from 1 in July and 3 in May>Jun. Plus, Gas Stations are again “really” up vs 2019 and again 4 Big Groups are all positive, up from 3 in Mar>Jul. Relevant Retail has been all positive in 15 of the last 17 months.

Overall Inflation Reality– The Total Retail CPI rose to 1.9% but the $ lift vs 24 rose to 22% above avg. The Restaurant CPI slowed to +3.7% and their $ lift moved up to 22% above avg. Gas deflation slowed to -0.4% but they are still in turmoil. Auto inflation stayed 2.6% but it rose to 5.8% vs 21. Auto sales grew 7.6% vs 24, 74% above avg – more pre-tariff buying. Inflation rose to 1.8% for Relevant Retail. Their lift was 8.5% above avg & they are again all positive. Progress is still slow.

Total Retail – Since Jun 20, every month but Apr 23, Jun 24 & Feb 25 has set a monthly $ales record. In 2023>25, Sales were on a roller coaster. Up Jul>Aug, down Sep, up Oct>Dec, down Jan 24, up Feb>Mar, down April, up May, down Jun, up Jul>Aug, down Sep, up Oct>Dec, down Jan>Feb 25, up Mar, down Apr, up May, down Jun, up Jul>Aug, down Sep. Prices are 1.8% and YOY $ are +5.7%, 22% above the 92>24 avg change of 4.7%. 42% of the 19>25 growth is real. Prices are still inflating, and cumulative inflation is still impacting sales. Growth: 24>25: 4.0%; Avg 19>25: +6.2%, 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, exceeding $1T for the 1^st time in 2023. August $ are up vs 24 and they have the biggest lifts vs 21 & 19. Inflation slowed to 3.7% vs 24 but it is +23.6% vs 21 and +31.7% vs 19. Their 6.8% YOY lift is 22% above their +5.6% 92>24 avg. They are all positive again, but just 33.9% of their 57.2% growth since 2019 is real. They are 3^rd in performance behind Relevant & Total Retail. Recovery started late but inflation started early. Growth: 5.7%; Avg 19>25: +7.8%, Real: +3.0%. They just account for 13.8% of Total Retail $, but their strong growth has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They overcame the stay-at-home attitude with great deals and 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 $. Their YE real 2022 sales numbers were even worse, -8.2% vs 21 and -8.9% vs 19. 23 started a sales rollercoaster but the $ hit a record, $1.595T. $ fell in Jan 24, grew Feb>Mar, fell Apr, grew May, fell June, grew Jul>Aug, fell Sep, grew Oct, fell Nov, grew Dec, fell Jan>Feb 25, grew Mar, fell Apr>Jun, rose Jul>Aug, fell Sep. Sep $ were +7.6% vs 24. 74% above avg – pretariff. They are again all positive, but just 24.7% of 19>25 growth is real. Growth: 5.1%; Avg 19>25: +5.3%, Real: +1.3%

Gas Stations – Gas Stations were hit hard by “stay at home”. They started recovery in Mar 21, and inflation began. Sales got on a rollercoaster in 22 but set a record, $583B. Inflation started to slow in Aug and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In Aug they rose to -3.7%. In Sep they were +2.7% but began deflating to -4.2% in Feb 24. In Mar>May $ grew, fell Jun, rose July, fell Aug/Sep, rose Oct, fell Nov>Feb 25, rose Mar>May, fell Jun, rose Jul, fell Aug/Sep. Sep $ vs 24: +4.1 (4.9% avg). Only down Ytd vs 24. Real $ are again all positive. Growth: -2.4%; Avg 19>25: +3.3%, Real: 0.07%. They show the cumulative impact of inflation and it can be both positive & 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. Their only down month until Feb 25 was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022, but all months set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, the roller coaster continued. A December lift set a new monthly record of $494.7B & an annual record of $4.997T. Sales fell Jan>Feb 24, rose Mar, fell Apr, rose in May, fell in June, rose Jul>Aug, fell Sep, rose Oct>Jan 25, fell Feb, rose Mar>May, fell Jun, rose Jul, fell Aug>Sep. The Sep 5.0% YOY lift is 8.5% above their 92>24 avg of +4.6%. They are all positive again and 53% of their 46.7% 19>25 growth is real, #1 in performance. Growth: 4.0%; Avg 19>25: +6.5%, Real: +3.7%. In 2024 their inflation rate dropped from 3.2% to 0.1%, stabilized at 0.5% Dec>Jan, rose to 0.7% in Mar, slowed to 0.6% in Apr, rose to 0.8% in May, 1.2% in Jun>Jul, 1.6% in Aug, & 1.8% in Sep. Inflation is pretty low, but its cumulative impact can slow growth. We’ll see what happens.

YOY inflation is low, but cumulative & impending lifts can affect sales. In Sep, just 1 actual YOY $ comparison was negative, 1 less than Mar>Aug. In Aug/Sep, there were no real drops – 1 in July, 3 in Jun. In Aug, Gas Stations were down vs 24. All others were up, but only Restaurants had an above avg lift. In Sep, Gas Stations were again down & all others up, but with above avg lifts. So in Aug/Sep, 4 big groups were all positive. Relevant Retail has now been all positive in 14 of 16 months. Sep sales fell vs Aug. However, the drop was much less than expected, but the Retail recovery is still slow.

Here’s a more detailed look at September by Key Channels (98% of September Ytd Rel Retl $)

Relevant Retail: Growth: +4.1%; Avg 19>25: +6.6%, Real: +3.7%. Only 3 of 11 were up from August. Vs Sep 24: 10 were up, Real: 8, Vs Sep 21: 7 were up, Real: 6. Vs 19: Only Dept Stores were down – both actually & really.
All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2021. Sales are -10.8% from Aug and all actual & real YOY measurements are negative. Their -4.6% Sep YOY drop is slightly better than their -4.7% avg change. Growth: -2.9%; Avg 19>25: -5.9%, Real: -7.4%.
Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -9.7% from Aug, but they are only really down vs Sep 24. However, only 42.0% of their 35.2% 19>25 lift is real. Their 1.3% YOY Sep lift is -84% below their 92>24 avg of +8.3%. Growth: 2.4%; Avg 19>25: +5.2%, Real: +2.3%.
Grocery- They depend on frequent purchases, so their changes are usually less radical. Actual $ are -4.4% from Aug but positive in all actual comparisons. Cumulative inflation has hit them hard as real $ are down monthly & Ytd vs 21. Only 7% of 19>25 growth is real but their 3.2% YOY lift is 0.5% above avg. Growth: 2.9%; Avg 19>25: +4.8%, Real: +0.4%.
Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are +2.1% from Aug and they are positive in all comparisons. Inflation has been relatively low so 68% of their 37.6% 19>25 growth is real. Plus, their +7.8% YOY lift vs Sep 24 is 45% above avg. Growth: 7.1%; Avg 19>25: +5.5%, Real: +3.9%
Clothing and Accessories – Clothes mattered less if you stayed home. That changed in March 2021 with strong growth through 2022. Sales are -15.2% from Aug but positive in all YOY measurements. 69% of their 19>25 growth is real. $ are +7.9% vs Sep 24, 2.9 times more than their Sep avg (pre-tariff buying). Growth: 5.2%; Avg 19>25: +3.4%, Real: +2.4%
Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation has slowed to 2.5%. $ are -1.6% from Aug but are only down monthly & Ytd vs 21. However, only 13% of their 19>25 growth is real. YOY vs Sep 24: +3.3%, 8% above avg. Growth: 4.7%; Avg 19>25:+2.7%, Real:+0.4%
Electronic & Appliances – They have had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are -3.2% from Aug and they are only actually up vs Sep 24 & Ytd 24,19. Deflation drove real numbers up, so all comparisons are positive. Sales are +7.2% vs Sep 24, 3.6 times the avg. Growth: 0.1%; Avg 19>25: 0.6%, Real: +3.8%.
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. Prices turned up in Apr>Sep 25 but sales are +0.1% from Aug. Actual $ are only down Ytd vs 24. Real sales are down for all but vs 2019. Just 17% of their 19>25 sales growth is real. YOY sales vs Sep 24 were 0.8%, -80% below their 4.1% Avg. Growth: -0.9%; Avg 19>25: +4.5%, Real: +0.8%.
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. They have been on a sales rollercoaster since June 24 and $ are -14.7% from Aug. Actual & real sales are only down Monthly & Ytd vs 21. 80% of their 19>25 growth is real. YOY Sales vs Sep 24 are +2.1%, -20% below avg. Growth: +0.7%; Avg 19>25: +3.9%, Real: +3.2%.
All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are +3.2% vs Aug and positive in all comparisons. They are 2^nd in the % increases vs 19 & vs 21 and 71.3% of their 51.6% 19>25 growth is real. Plus, their 10.8% YOY Sep lift is 2.6 times more than their 92>24 avg of +4.1%. Growth: +8.4%; Avg 19>25: +7.2%, Real: 5.4%.
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 1^st time and they broke the $1 Trillion barrier. $ are -1.0% from Aug and their YOY lift of 8.6% is -13% below the 9.9% avg. However, they are positive in all comparisons and 82% of their 114.3% 19>25 growth is real. Growth: 7.0%; Avg 19>25: +13.5%, Real: +11.6%.

Recap – Driven by Relevant Retail, the Pandemic recovery was widespread by Y/E 2021. In 2022 we were hit with the strongest inflation in 40 years. Overall inflation has slowed considerably from its Jun 22 peak but only 2 channels are now deflating, down from 5 in May. Deflation helps, but cumulative inflation can still have a negative impact – slowed YOY growth and even sales drops. $ only rose from Aug for 3 of 11 channels. All of the 3 lifts were above avg. 6 of the 8 drops were bigger than avg. The biggest concern is still YOY drops and smaller lifts. Relevant Retail’s 5.0% lift vs Sep 24 was 8.5% above avg. 10 channels had a YOY lift vs Sep 24, 1 more than Aug and 2 more than July. Plus, 6 of the 10 lifts were above avg, up from 4 in Aug and 5 in July. Here is some more mixed news. In Mar>Jul 3 Big Groups were all positive. That grew to 4 in Aug and again in Sep. In July/Aug, 5 smaller channels were also all positive, up from 4 in June. That fell to 4 in September. Relevant Retail has now been all positive in 14 of the last 16 months. The situation is definitely mixed and still concerning as the progress is slow.

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 vs 2021 to show cumulative inflation.

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

Here are some answers to some obvious questions. Note: All Rel Rtl but Furniture, Groceries, Clothing increased prices.

1. Why is the group for Nonstore different from the Internet?

Non-store is not all internet. It also includes Fuel Oil Dealers, the non-motor fuel Energy Commodity.

2. Why is there no Food at home included in Nonstore or Internet?

Online Grocery purchasing is becoming popular, but almost all is from companies whose major business is brick ‘n mortar. These online sales are recorded under their primary channel.

3. 5 Channels have the same CPI aggregate but represent a variety of business types

They also have a wide range of product types. Rather than try to build aggregates of a multitude of small expenditure categories, it seemed better to eliminate the biggest, influential groups that they don’t sell. This method is not perfect, but it is certainly closer than any existing aggregate.

4. Why are Grocery and Supermarkets only tied to the Grocery CPI?

According to the Economic Census, 76% of their sales comes from Grocery products. Grocery Products are the driver. The balance of their sales comes from a collection of a multitude of categories.

5. What about Drug/Health Stores only being tied to Medical Commodities.

An answer similar to the one for Grocery/Supermarkets. However, in this case Medical Commodities account for over 80% of these stores’ total sales.

6. Why do SuperCtrs/Clubs and $ Stores have the same CPI?

Big Stores sell more fresh groceries, Groceries account for ¼ of $ Store sales. Same Ctgys – different mix.