Retail Channel $ Update – April Monthly & May Advance

In May, Commodities inflation vs last year slowed to 0.1% from 0.3% in April. Although radically down from its peak, cumulative inflation still impacts consumer spending. The YOY sales increase for May is 40+ below the 92>23 average for Relevant Retail and for all big channels but Restaurants. Prices are now deflating in many channels but still high vs 21, which slows growth in the amount of product sold. There is still a long road to recovery, so we’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI from US BLS data.

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

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

Both reports include the following:

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

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

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

First, the April Monthly. All but Gas Stations were down from March. Gas Stations were down Ytd vs 23 & Auto vs Apr 23. All other actual $ are up. We should note that Gas Stations are still selling less product than in 2019. Also, Relevant Retail is “really” down again monthly vs 21, after 4 straight months of all positives. ($ are Not Seasonally Adjusted)

The April Monthly is $1.4B less than the Advance report. Restaurants: +$0.6B; Auto: +$1.0B; Gas Stations: -$1.3B; Relevant Retail: -$1.8B. As expected, $ales were down vs March for all but Gas Stations. Actual sales for all but Auto &  Gas Stations were positive in all YOY monthly & Ytd measurements. Gas prices turned up, but their sales were down Ytd vs 23. Auto prices are deflating but $ were down vs April 21. There were 7 “real” sales drops, down from 8 last month. Gas Stations had 3 but only Restaurants had none. Restaurants have the biggest increases vs 21 & 19 but Relevant Retail is still the top “real” performer vs 2019. However, only 52% of their growth is real.

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

Overall– Only 5 were up from March. vs Apr 23, Only 3 were actually and “really” up. Vs Apr 21, 6 were up but only 3 were real increases. Vs 2019, Off/Gift/Souv were actually & really down and Disc Dept Strs were also really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 30.3% since 2019. Prices for the Bldg/Matl group have inflated 18.0% since 2021 which is having an impact. HomeCtr/Hdwe are only actually up vs Apr 23 and Ytd vs 21 & 19 but Farm stores are only actually up vs 19. All “real” measurements vs 21 are negative for Home/Hdwe. However, all “real” numbers but vs 19 are negative for Farm Strs. Plus, only 25% of the overall Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.3%, Real: 1.2%; Farm: 6.2%, Real: 2.1%
  • Food & Drug – Both are truly essential. Except for the pandemic food binge buying, they tend to have smaller changes in $. In terms of inflation, the Grocery rate is still less than half of the rate for Drug/Med products. Drug Stores are down vs March but again up in all other measurements and 64% of their 2019>24 growth is real. Supermarkets $ are down vs April 23 and their only real positives are Ytd vs 23 & 19. Plus, only 7% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.2%, Real: +0.4%; Drug Stores: +4.6%, Real: +3.1%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down from March and their only positives are actual & real Ytd vs 19. Prices are still deflating, -1.1% vs 23. Deflation started in April 23 and is a big change from +1.1% in 22>23 and +7.9% in 21>22. The result is that 60% of their 38.6% lift since 19 is real. Avg 19>24 Growth Rate is: +6.7%; Real: +4.3%. 
  • Gen Mdse Stores – Sales were down for all vs March. All actual sales but vs April 23 were up for Club/SupCtr/$ Stores. $ stores were up for all. On the other hand, Disc Dept Stores were only actually up Ytd vs 21 & 19 but were really down for all. Plus, only 8% of their growth is real. The other channels average 47% in real growth. Avg 19>24 Growth: SupCtr/Club: 6.0%, Real: 2.8%; $/Value Strs: +6.4%, Real: +3.2%; Disc. Dept. Strs: +1.9%, Real: -0.2%.
  • Office, Gift & Souvenir Stores – Sales were up from March, but it was not enough. They are negative in all actual comparisons but Ytd vs 21 and their real sales numbers are all negative. This includes all negatives vs 2019. Their recovery started late, and their slow progress has been stalled since June 23. Avg Growth Rate: -0.8%, Real: -2.8%
  • Internet/Mail Order – $ are up 13.1% from March and set a new monthly record of $108.5B. All measurements are positive, but their growth is still only 77.5% of their average since 2019. However, 82.3% of their 118.2% growth since 2019 is real. Avg Growth: +16.9%, Real: +14.6%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, rose in Sep>Nov, fell in Dec>Jan, then grew in Feb>Apr. All measurements vs 23, 21 & 19 are positive. They are still in 2nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 75% of their 64.1% growth since 2019 is real. Average 19>24 Growth: +10.4%, Real: +8.2%.

April brought it’s usual drop. Most channels – big and small were down vs March. The YOY lifts continue to be small as only 3 of 11 smaller channels were actually and really up vs April 23. Prices are still deflating in 7 of 11 channels but cumulative inflation is still a factor. Sales increases are lower as 8 of 11 channels were really down vs April 21. The Retail Recovery is definitely slowing. The commodities CPI slowed to 0.1% in May. Let’s look for any impact on Retail $ales.

May sales vs April increased for all, not surprising. An Apr>May Total Retail lift has happened every year since 1992. Plus, the 6.1% lift is just 2% less than the average of 6.2%. All actual $ measurements are positive vs 23, 21 & 19 for all groups but Gas Stations Ytd vs 23. The lifts for all big groups but Restaurants (-21%) vs May 23 were all at least 41% below their 92>23 Average. Inflation is still a big factor. The rate for all commodities, the best pricing measure for Retail, fell from 0.3% to 0.1% but is 14.0% vs 21. There is some “real” retail good news. In April, 6 measurements were “really” down vs 23 & 21 and 2 came from Gas Stations. In May, 4 were still really down – only from Auto & Gas Stations. Also, you may remember that from Nov 23>Feb 24 Relevant Retail had 4 straight months of all positive measurements. In Mar>Apr their real monthly sales vs 21 turned negative. In May they are again all positive. BTW – So is Total Retail.

Overall – Inflation Reality – For Total Retail, inflation slowed and all measurements are again positive. For Restaurants, inflation remains high, +3.9% but they are still all positive. Gas prices rose and that group is still in turmoil. Auto prices are down but are still +9.9% vs 21 which continues to slow actual & real sales. Prices are slightly deflating for Relevant Retail and all measurements are again positive. Their slow progress is continuing.

Total Retail – Since June 20, every month but April 23 has set a monthly sales record. In 2023, Sales were on a roller coaster. Up in Jul>Aug, down in Sept, up in Oct>Dec, down in Jan 24, up in Feb>Mar, down in April, up in May. Inflation is down to 0.1%. YOY sales growth is only 59% of the 92>23 avg. Sales are up 3.3% Ytd vs 2023, only 48% of their avg 19>24 growth. All YOY comparisons are now positive but only 39% of the 19>24 growth is real. YOY inflation in Total Retail has significantly slowed but we still see its cumulative impact. Growth: 23>24: 3.3%; Avg 19>24: +6.9%, Real: +2.9%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, exceeding $1T for the 1st time in 2023 and even setting a new monthly record of $99.5B this month. They have the biggest Ytd increases vs 23, 21 & 19 and all real sales are positive. Inflation slowed to 3.9% in May but is still +20.6% vs 21 and +26.2% vs 19. 38.6% of their 50.8% growth since 19 is real and they remain 3rd in performance behind Relevant & Total. Recovery started late but inflation started early. Growth: 6.1%; Avg 19>24:+8.6%, Real: +3.6%. They just account for 13.6% of Total Retail $, but their performance improves the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – They actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021 but much of it was due to skyrocketing inflation. In 22, sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their Y/E real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 was a true rollercoaster but the $ set a new record, $1.595T. $ fell in Jan 24, grew Feb>Mar, fell in Apr, then grew in May. Only May & Ytd $ vs 21 are “really” negative. Prices vs 23 are -3.9%. Only 21.4% of 19>24 growth is real. Growth: 2.6%; Avg 19>24: +5.8%, Real: +1.4%.

Gas Stations – Gas Stations were hit hard by “stay at home”. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In August they rose to -3.7%. In Sep they were +2.7% but began deflating to -4.2% in Feb. In Mar>May they grew again. $ are only down Ytd vs 23. Pricing is a factor in the $ drop vs 23 but real $ vs May 21 & Ytd vs 21 & 19 are also down. Growth: -0.8%; Avg 19>24: +4.7%, Real: -1.2%. They show the cumulative impact of inflation and demonstrate how deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for ≈60% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, the roller coaster continued. A December lift set a new monthly record of $494.7B & an annual record of $4.997T. Sales fell in Jan>Feb 24 rose in Mar, fell in Apr, then rose in May, a normal pattern. The May YOY lift of 2.8% is down 41% from their 92>23 avg. However, all actual & real comparisons are again positive. We should also note that 51% of their 41.6% 19>24 growth is real – #1 in performance. Growth: 3.4%; Avg 19>24: +7.2%, Real: +4.0%. This is where America shops. They finished 2023 and started up 2024 strong. In Mar>Apr their recovery appeared to be slowing. In May, the situation is improving.

Inflation is still low, but the cumulative impact is still there. Sales increases are still small, which is very evident in May. However, it is also significant that there are only 4 real drops vs 23 & 21, down from 6 in April. Restaurants are still doing well, but the Auto group and Gas Stations remain in turmoil. Although not as visible, the biggest concern is still with Relevant Retail. Sales increases remain markedly lower but actual & real sales comparisons are again all positive. Total Retail is also all positive. The recovery appears to be growing again.

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

  • Relevant Retail: Growth: +3.4%; Avg: +7.2%, Real: +4.0%. All 11 were up from Apr. Vs May 23: 7 were up, Real: 8. Vs May 21: 8 were up, Real: 5. Vs 19: Only Dept Stores were actually & really down. Furnishing strs. were also really down.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are up 12.0% from April but their actual $ are only up vs May 23 & Ytd vs 21. Except vs May 23, their real numbers are all negative. They are even really down -10.1% vs 2019. Growth: -2.0%; Avg 19>24: -0.1%, Real: -2.1%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are +9.5% from April and they are positive in all measurements. However, only 45% of their 34.3% 19>24 lift is real – inflation’s impact. Ytd growth is below Avg for the 2nd consecutive month. Growth: 4.1%; Avg: +6.1%, Real: +2.9%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Actual $ are +8.4% from April and positive for all comparisons. However, cumulative inflation has hit them hard. Real $ are down vs 21 and only 7% of the growth since 2019 is real. Growth: 1.6%; Avg 19>24: +5.2%, Real: +0.4%.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are +3.4% from Apr. They are only actually, and really down vs May 23 and really down Ytd vs 23. Because inflation has been relatively low, 63% of their 24.8% growth from 2019 is real. Growth: 2.2%; Avg 19>24: +4.5%, Real: +2.9%
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales are up +13.6% from April and positive in all comparisons but real vs May 21. Plus, 63% of their 19>24 growth is real. Growth: 2.5%; Avg 19>24: +3.2%, Real:+2.1%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are still deflating but they were high in 2022. Sales are +4.2% from April but negative in all other measurements but actual Ytd sales vs 2019. They have sold less product in 2024 than 2019. Growth: -7.9%; Avg 19>24: +2.3%, Real: -0.4%
  • Electronic & Appliances – This channel has had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are up +7.6% from April and all comparisons are now positive – a big turnaround. We should also note that their current Ytd growth is essentially equal to their 19>24 avg. Growth: +0.76%; Avg 19>24: +0.79%, Real: +3.6%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices are still deflating, and sales are up 8.0% from April but they are only positive vs May 21 & Ytd vs 21 & 19. Prices may be deflating but are still 16.8% above 21 so real sales are all negative except Ytd vs 19. Also, just 22% of their 19>24 sales growth is real. Growth: -3.0%; Avg 19>24: +5.5%, Real: +1.3%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. Actual sales are +11.0% from April but down for all but Ytd vs 2019. The only positive real sales measurements are vs May 23 and Ytd vs 23 & 19. Their inflation rate has been lower than most groups so 71% of their 27.3% growth since 2019 is real. Growth: -2.5%; Avg 19>24: +4.9%, Real: +3.6%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are +10.7% vs April and are again positive in all measurements – actual & real. They are still 2nd to NonStore in the % increase vs 19 and vs 21. 68% of their 44% 19>24 growth is real but their current rate is still below Avg. Growth: +7.2%; Avg 19>24: +7.5%, 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 1st time and they broke the $1 Trillion barrier. $ are only +3.0% from April. Their YOY lift slowed to +7.3% in May and Ytd they are 40% below Avg. They are positive in all measurements and 81% of their 102% 19>24 growth is real. Growth: 9.1%; Avg: +15.1%, Real: +12.7%.

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, inflation has slowed considerably from its June 22 peak and in May, 8 channels are now deflating. This should help the Retail Situation. As expected, Sales grew from April. The 7.1% lift for Relevant Retail was above their 6.1% avg but the problem is with slowing YOY monthly increases. The 2.8% Relevant Retail lift vs May 23 was 41% below their 92>23 average 4.8% increase and 4 of 11 channels actually had a decrease. Miscellaneous led the way among the 7 with increases with +8.0%. Inflation is low and even deflating in many channels. However, we are still seeing the impact of high cumulative inflation. Only a few channels are doing well. The slowing of the YOY sales increase has become the biggest problem. In April & May no channels had a Ytd lift above their 19>24 Avg. There is some good news. After a 2-month pause, Relevant Retail is again positive in all comparisons vs 23, 21 & 19. That’s 5 of the last 7 months. The slow recovery continues.

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

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

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