Retail Channel $ Update – December Monthly & January Advance

In January, YOY Commodities’ inflation rose to 0.8% from 0.3%. Even with a low inflation rate, high cumulative inflation vs 21 can still impact consumer spending and slow $ales growth.  We saw some evidence of this in January. Total Retail $ were +4.81% vs 24, 0.9% above the average 92>24 lift but Relevant Retail was +4.0%, -15.5% below the January average. The situation is mixed and complex and there is still a long road to full recovery. 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 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 December Monthly Report and then go to the January 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:     (Note: December Ytd data = Year-End, Annual Numbers & January monthly data = 2025 Ytd)

• 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 December Monthly. Only Relevant & Total were up from November and there were 3 actual sales drops –  all in Gas Stations. We should note: Gas Stations are still selling less product than in 2019. Also, Relevant Retail is all positive again. They have been all positive in 10 of the last 13 months and now in 6 of the last 7. ($ are Not Seasonally Adjusted)

The December Monthly is $4.9B more than the Advance report. Restaurants: +$0.9B; Auto: -$0.1B; Gas Stations: +$0.3B Relevant Retail: +$3.7B. Relevant Retail was the driver in the $ales lift vs November, but only Gas Stations were down. A Nov>Dec increase in Total Retail  has happened every year since 1992. However, the 8.6% lift was 41% below average. There were 3 drops in actual sales – Monthly vs 23 & 21 and Ytd vs 23 for Gas Stations. There were 3 “real” sales drops, 1 more than November. All but Gas Stations & Restaurants were all positive. Restaurants still have the biggest increases vs 21 & 19 but Relevant Retail stayed at the top of “real” performance vs 2019. However, only 51% of their growth is real.

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

Overall– 10 of 11 were up from November. Vs Dec 23, 10 were actually and “really” up. Vs Dec 21, 6 were up but only 5 were real increases. Vs 2019, All were actually up and only Off/Gift/Souv and Disc Dept Stores were really down.

• Building Material Stores – The pandemic focus on home has produced sales growth of 32.1% since 2019. Prices for the Bldg/Matl group have inflated 9.3% from 2021 and 21.5% from 2019 which is having an impact. Sales vs November were -9.4% for HomeCtr/Hdwe but +5.5% for Farm Stores. Vs other years, HomeCtr/Hdwe are only actually & really down vs Dec 23, but Farm stores are actually and really down in all comparisons but vs Dec 23 & 2019. Only 27% of the Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.6%, Real: 1.5%; Farm: 6.5%, Real: 2.4%
• 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 now 3.6 times higher than the rate for Drug/Med products. Drug Stores are positive in all measurements and 67% of their 2019>24 growth is real. Supermarkets’ actual $ are up in all measurements and they are only “really” down vs 2021. However, only 6.5% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.3%, Real: +0.4%; Drug Stores: +5.4%, Real: +3.8%.
• Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 41% from November but their only other positives are vs Dec 23 & Ytd vs 19. Prices are still deflating, -2.0% 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 61% of their 34.5% lift since 19 is real. Avg 19>24 Growth Rate is: +6.1%; Real: +3.9%.
• Gen Mdse Stores – All actual & real sales were up for Club/SupCtrs & $ stores. However, even with an 28.0% increase from November, Discount Dept Stores were only actually up vs 19. All of their real measurements are negative so none of their growth since 2019 is real. The other channels average 44% in real growth. Avg 19>24 Growth: SupCtr/Club: 6.0%, Real: 2.8%; $/Value Strs: +6.4%, Real: +3.2%; Disc. Dept. Strs: +1.2%, Real: -0.8%.
• Office, Gift & Souvenir Stores – After a big drop in November, Sales rose 38.8% in December. They are only actually up vs Dec 23 & Ytd vs 19 and all of their real sales numbers, but vs Dec 23 are negative. Their recovery started late, and their progress slowed but may be restarting again. Avg Growth Rate: +0.003%, Real: -1.9%
• Internet/Mail Order – Sales are +13.9% from November and set a new monthly record of $147.7B. All measurements are positive, but their Ytd growth, +10.3%, is still only 66% of their average since 2019. However, 82.0% of their 106.7% growth since 2019 is real. Avg Growth: +15.6%, Real: +13.4%. 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 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 Jun>Aug, rose Sep>Nov, fell Dec>Jan 24, grew Feb>May, fell Jun>Sep, grew in Oct, fell in Nov, then rose in Dec. All measurements are again positive and they are in 2^nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 73% of their 53.2% growth since 2019 is real. Average 19>24 Growth: +8.9%, Real: +6.8%

December had its usual lift vs November, but the Relative Retail lift was -43% below avg. However, 10 small channels were up. The YOY lift was avg for Total, but 20% above avg for Relevant. Also, 10 smaller channels and 4 of 5 big groups were up. Prices are still deflating in 7 channels, but cumulative inflation is impacting $ as only 5 channels were really up vs Dec 21. The Retail Recovery is still slow. The December commodities CPI was 0.3% but rose to 0.8% in January. Let’s see if it impacts Retail.

Dec>Jan sales were down for all. A Dec>Jan Total Retail decrease has happened every year since 1992 but the  -16.5% drop is -23% less than average. All YOY $ comparisons are positive for the first time since Jan 23. The Total Retail lift of 4.8% vs January 24 was 0.9% above their 92>24 average but the Relevant Retail lift vs Jan 24 was -15.5% below average. The Gas Station lift was also below average (-54%). However, the YOY lifts for Restaurants (+24% vs avg ) & Auto (+47% vs avg) were both significantly above average. Inflation is still a factor. The CPI for all commodities rose to 0.8% but it is 18.5% vs 21. The inflation surge was just beginning back then. There is some other “real” news. Only 2 measurements were “really” down. In December, there were 3 but back in September there were 5. All but Gas Stations were YOY all positive. After 2 months with a negative, Relevant Retail has now been all positive in 8 of the last 9 months.

Overall – Inflation Reality – For Total Retail, inflation rose to +0.8% but YOY sales grew 4.8% vs 24. For Restaurants, inflation remains high, +3.3% but their sales rose 6.9% vs 24. Gas prices rose and that group is still in turmoil. Auto prices stopped deflating but their sales grew +6.8% vs Jan 24 and they are again all positive. Inflation remained stable at 0.5% for Relevant Retail and YOY sales are still all positive. Their slow progress continues.

Total Retail – Since June 20, every month but April 23 & June 24 has set a monthly sales record. In 2023>24, Sales were on a roller coaster. Up Jul>Aug, down Sept, up Oct>Dec, down Jan 24, up Feb>Mar, down April, up May, down June, up Jul>Aug, down in Sep, up in Oct>Jan 25. Prices are now +0.8% but YOY sales are up 0.9% above the 92>24 average. The lift is still -27% below the 19>25 avg. but now 50.9% of the 19>25 growth is real, up from 39.1%. Low inflation is helping but cumulative inflation is still having an impact. Growth: 24>25: 4.8%; Avg 19>25: +6.6%, Real: +3.6%.

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. January $ are up vs 24 and they have the biggest lifts vs 23, 21 & 19. Inflation slowed to 3.3% in January but is still +24.6% vs 21 and +29.8% vs 19. Their 6.9% YOY lift is 24% above their 92>24 avg but -16% below 19>25. Plus, just 39.2% of their 60.9% growth since 2019 is real and they remain 3^rd in performance behind Relevant & Total Retail. Recovery started late but inflation started early. Growth: 6.9%; Avg 19>25:+8.2%, Real: +3.6%. They just account for 13.6% of Total Retail $, but their strong growth has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They worked to overcome 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. 2023 started a true sales rollercoaster but the $ set a new 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, then grew in Dec>Jan 25. Jan $ were +6.8% vs 24, 47% above avg & 10% above 19>25. All comparisons are positive, but only 34.1% of 19>25 growth is real. Growth: 6.8%; Avg 19>25: +6.2%, Real: +2.3%

Gas Stations – Gas Stations were hit hard by “stay at home”. They started to recover 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 they grew, fell June, rose July, fell Aug>Dec, then rose in Jan. In Jan, actual $ are up in all comparisons vs 24, 21 & 19. Real sales are down vs 21 & 19. Their Jan lift is -54% below avg and -47% below 19>25.  Growth: 2.4%; Avg 19>25: +4.5%, Real: -0.8%. They show the cumulative impact of inflation and 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 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, rose in May, fell in June, rose Jul>Aug, fell Sep, then rose Oct>Jan 25. The Jan 4.0% YOY lift is -15.5% below their 92>24 avg and -39% below 19>25. However, 55% of their 47.0% 19>24 growth is real – #1 in performance. Growth: 4.0%; Avg 19>25: +6.6%, Real: +3.9%. In 2024 their inflation rate dropped from 3.2% to 0.1% and stabilized at 0.5% Dec>Jan but its cumulative impact continues to slow growth. We see this in January. We’ll see what happens in the upcoming months.

In 24>25 inflation has slowed, but its cumulative effect has produced a mixed bag. Actual sales comparisons for all big groups are all positive for the 1^st time since Jan 23. In January, there were only 2 real drops – both from Gas Stations. In YOY lifts Total Retail’s Jan 4.8% lift was +0.9% above avg. Restaurants were +24% & Auto +47% vs avg. Gas Stations were -54% vs avg and Relevant Retail’s was -15.5% below avg. All $ comparisons – actual & real are positive for all but Gas Stations. (now 8 of 9 months for Rel. Rtl) Overall, January was pretty good. The slow recovery continues.

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

• Relevant Retail: Growth: +4.0%; Avg: +6.6%, Real: +3.9%. 11 were down from Dec. Vs Jan 24: 10 were up, Real: 10, Vs Jan 21: 10 were up, Real: 6. Vs 19: Only Dept Stores were really down.
• All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are -44.4% from December but only their real numbers vs 21 & 19 are negative. Their Jan 1.4% is much more than the -0.4% avg. and it is 2.3 times bigger than the 19>25 avg.  Growth: 1.4%; Avg 19>25: 0.6%, Real: -0.9%.
• Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -21.2% from Dec, but they are positive in all measurements. However, only 50% of their 39.9% 19>25 lift is real. Their 5.8% lift is -30% below their 92>24 avg. but equal to 19>25. Growth: 5.8%; Avg 19>25: +5.8%, Real: +3.1%.
• Grocery- These stores depend on frequent purchases, so their changes are usually less radical. Actual $ are -3.1% from Dec but positive in all comparisons. However cumulative inflation has hit them hard. Real $ are down vs 21 and only 10% of 19>25 growth is real. Their 5.2% lift is 66% above avg & +6% vs 19>25. Growth: 5.2%; Avg 19>25: +4.9%, Real: +0.5%.
• Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are -11.3% from Dec but they are positive in all comparisons. Inflation has been relatively low so 63% of their 31.9% 19>25 growth is real. Their YOY lift is -11% below avg and -2% below 19>25. Growth: 4.6%; Avg 19>25: +4.7%, Real: +3.1%
• Clothing and Accessories – Clothes mattered less when you stayed home. That changed in March 2021 with strong growth through 2022. Sales are -51.8% from Dec but all sales comparisons are positive. 54% of their 19>24 growth is real. Their 3.6% YOY lift is 7% above avg but only equal to 19>25.  Growth: 3.6%; Avg 19>25: +3.6%, Real:+2.7%
• 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 22. Sales are -16.8% from Dec but only really negative vs 21. However, only 28% of their 19>25 growth is real. YOY lift: 58% above avg & 73% above 19>25. Growth: 5.2%; Avg 19>25: +3.0%, Real: +0.9%
• 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 -31.6% from Dec but they are now positive in all comparisons. They have had strong deflation and their 25 growth is only 0.2%, -90% below avg, but more than 19>25 (0%). Growth: 0.2%; Avg 19>25: +0.0%, Real: +3.3%.
• Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices are still deflating, but sales are -10.2% from Dec. Actual sales are all positive and Real sales are only down vs 21, but just 5% of their 19>25 sales growth is real. Their 24>25 sales lift is -84% below avg and -81% below 19>25. Growth: 0.7%; Avg 19>25: +3.6%, Real: +0.2%.
• Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. They have been on a sales rollercoaster since June but $ are -43.6% from Dec and only actual and real sales vs 19 are positive. However, 77% of their 19>25 growth is real. Sales are  -4.3% vs 24. Their 92>24 avg Jan lift is 2.9%. 19>25 is 3.4%. Growth: -4.3%; Avg 19>25: +3.4%, Real: +2.6%.
• 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 -14.8% vs Dec but positive in all comparisons. They are 2^nd in the % increases vs 19 & vs 21. 74.3% of their 51.3% 19>25 growth is real. Their 6.6% YOY lift is 52% above their 92>24 avg, but -7% below 19>25. Growth: +6.6%; Avg 19>25: +7.1%, Real: 5.5%.
• 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 -23.3% from Dec. Their YOY lift is -60% below their avg and -71% below 19>25. They are positive in all comparisons and 83% of their 111.6% 19>25 growth is real. Growth: 3.8%; Avg 19>25: +13.3%, Real: +11.6%.

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 7 channels are currently deflating. Any deflation should help the Retail Situation. As expected, $ fell from December for all 11 channels but the -21.5% drop for Relevant Retail was 25% less than avg. Their 4.0% lift vs Jan 24 was 15.5% below avg, but 10 of 11 smaller channels had a $ increase and sold more product. 5 of those lifts were above avg. Perhaps the best news is that all big groups & 10 smaller channels were positive in all actual sales comparisons. Factoring inflation into the numbers, 4 big groups and 6 channels were “all positive”. Relevant Retail has now been all positive in 8 of the last 9 months. The biggest negative is the smaller lift by Relevant Retail. However, it is primarily being driven by a few larger channels – NonStore, SuprCtr/Clubs/$ & Bldg Matl/Farm. Overall, January sales were much lower than December, but the performance shows that the 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.

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

Here are some answers to some obvious questions. ALSO NOTE: 4 of the 8 January “pinks” are just slowed deflation

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