Retail Channel $ Update – December Monthly & January Advance

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In January, YOY Commodities’ inflation slowed to 1.0% from 1.7%. Even with a low inflation rate, high cumulative inflation vs 21 can still impact consumer spending and slow $ales growth.  We saw evidence of this in January. Total Retail $ were +3.1% vs 25, -35% below the average 92>25 lift and Relevant Retail was +4.4%, still -8% below the January average. The situation is 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 – normally, 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 data = 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 Gas Stations were down from November and there were only 2 actual sales drops – both in Gas Stations. We should note: Gas Stations are still selling a little more product than in 2019. Also, Relevant Retail is all positive again. They have been all positive in 18 of the last 20 months. ($ are Not Seasonally Adjusted)

The December Monthly is $0.1B more than the Advance report. Restaurants: No Chge; Auto: -$0.1B; Gas Stations: -$0.2B; Relevant Retail: +$0.4B. 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 10.9% lift was 27% below average. There were 2 drops in actual sales – Monthly vs 21 and Y/E vs 24 for Gas Stations. There were no “real” sales drops, 2 less than November. All but Gas Stations 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 41.8% 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 24, 11 were actually and 7 “really” up. Vs Dec 21, 8 were up but only 6 were real increases. Vs 2019, Only Dept Stores were actually and really down, but Off/Gift/Souv were also really down.

  • Building Material Stores – The pandemic focus on home has produced $ growth of 30.2% since 2019. Prices for the group have inflated 18.0% from 21 and 24.4% from 2019 which is having an impact. HomeCtr/Hdwe Sales vs Nov were -0.7% for but 12.6% for Farm Stores. Vs other years, Farm stores are actually up for all, but their Real $ were down vs 21. HomCtr/Hdwe are only actually & really up vs 2019 & actually vs Dec 24. Only 16% of the Bldg Mat. group’s 19>25 lift was real. HomeCtr/Hdwe: Ytd: -2.6%; Avg 19>25 Growth: 4.7%, Real: 0.4%; Farm: Ytd: +4.8%; Avg: 6.4%, Real: 2.6%
  • Food & Drug – Both are essential. Except for the COVID food binge, they tend to have smaller changes in $. Vs Nov, Supermarkets: +3.9%; Drug: +15.8%. In terms of inflation, the Groceries rate is 60% higher than Drug/Med products. Drug Stores are positive in all measurements and 71.3% of their 2019>25 growth is real. Supermarkets’ actual $ are up in all comparisons, but they are only “really” up Ytd vs 21 & 19 and only 8.4% of their 19>25 increase is real growth. Supermarkets: Ytd: +3.2%; Avg 19>25: +4.9%, Real: +0.5%; Drug Stores: Ytd: +7.9%; Avg: +6.0%, Real: +4.5%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are +44.3% from Nov and their only negatives are actual & real Ytd vs 21 & actual Ytd vs 24. Prices stopped deflating vs 24. Deflation started in April 23 and was a big change from +1.1% in 22>23 & +7.9% in 21>22. This caused 63% of their 36% lift since 19 to be real. Ytd: -1.3%; Avg 19>25: +4.9%; Real: +3.5%
  • Gen Mdse Stores – Sales were +14.2% vs Nov. Except for real vs Dec 24 for clubs, all YOY comparisons were up for $ Strs & SupCtr/Clubs. Dept Stores are negative in all comparisons but vs Dec 24. Their Actual sales are even -28.2% from 19 (Real: -35.2%). The other channels have an average of 40.3% in real growth. SupCtr/Club: Ytd: +2.1%; Avg 19>25: 4.9%, Real: 2.1%; $/Value Strs: Ytd: +2.1%; Avg: +5.5%, Real: +2.7%; Dept. Strs: Ytd: -0.8%; Avg: -5.4%, Real: -7.0%.
  • Office, Gift & Souvenir Stores– Sales took off, +34.4% from Nov. They are actually up in all but vs Dec 21, but still really down vs 21 & 19. Their recovery started late. It was slowly restarting in Jun/Jul, but their progress had slowed. It took off in Oct but slowed in Nov & grew in Dec. Their recovery continues. Ytd: +3.7%; Avg Growth Rate: 0.3%, Real: -1.4%
  • Internet/Mail Order – Sales are +16.7% from Nov to $156.6B, a Dec record. All YOY measurements are positive, but their YOY growth, +7.0%, is only 49.6% of their average since 2019. However, 82.1% of their 120.5% growth since 2019 is real. Ytd: +7.0%; Avg Growth: +14.1%, Real: +12.1%. 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 1st time in 21. In 22 their $ dipped in Jan, Jul, Sep>Nov, rose Dec, fell 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, fell Jun>Sep, rose Oct, fell Nov, rose Dec. All comparisons are positive, and they are right behind the Internet, in the % increase vs 19 & vs 21. Also, 76% of their 69.3% growth since 2019 is real. Ytd: +10.0%; Avg 19>25: 9.2%, Real: +7.3%

Dec had its usual lift vs Nov, but the Rel Retl lift was -34% below avg. However, 10 small channels were up. The YOY lift vs 24 was below avg for Total: -20% & Relevant Retl: -13%. However, all big groups & 11 smaller channels had lifts. Also, prices are only deflating in Gas Stations, but cumulative inflation has an impact, as only 6 channels were really up vs Dec 21. The Retail Recovery is slow. In Jan, the commodities CPI fell from 1.7% in Dec to 1.0%. Let’s see if it impacts Retail.

Dec>Jan sales were down for all. A Dec>Jan Total Retail drop has happened every year since 1992. The -17.4% drop is 18% less than the -21.1% avg. There were 2 YOY $ drops, the same as Dec. Only 3 Big Groups were up vs 25 and the Total Retail lift of 3.1% vs Jan 25 was 35% below their +4.7% 92>25 avg. However, the Relevant Retail 4.4% increase vs Jan 25 was only 8% below their +4.7% avg. Inflation is still a factor. The CPI for all commodities slowed to 1.0% from 1.7% vs last year but it rose from 7.7% to 19.7% vs 21. There is some not so good “real” news. 1 “real” measurement was down, and it was Gas Stations vs 2019, so they are again selling less Gas than in 2019. Also, 3 Big Groups are again all positive, down from 4 in Dec. However, Relevant Retail has been all positive in 19 of the last 21 months.

Overall Inflation Reality– The Total Retail CPI slowed to 1.0% but the $ lift vs 25 was 35% below avg. The Restaurant CPI stayed +4.0% and their $ lift was 8% below avg. Gas prices dropped to -7.3%. They are still in turmoil. Auto inflation flipped to -0.5% vs 25 but are 19.4% vs 21. Sales fell -0.1% vs 25 – far below their 4.5% avg change. Inflation stayed 2.0% for Relevant Retail and their lift was 8% below avg, but they are again all positive. Progress slowed in January.

Total Retail – Since Jun 20, every month but Apr 23, Jun 24 & Feb 25 has set a monthly $ales record. In 2023>26, Sales got 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, up Oct, down Nov, up Dec, down Jan. Prices are 1.0% and YOY $ are +3.1%, 35% below avg. 43% of the 19>26 growth is real. Inflation slowed but cumulative inflation is still impacting sales. Growth: 25>26: 3.1%;Avg 19>26: +6.0%, 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. January $ are up vs 25 and they have the biggest lifts vs 21 & 19. Inflation stayed 4.0% vs last year, but it is +29.5% vs 21 and +34.9% vs 19. Their 5.0% YOY lift is 8% below their +5.4% 92>25 avg. They are all positive again, but just 35% of their 66% growth since 2019 is real. They are 3rd in performance behind Total & Relevant Retail. Recovery started late but inflation started early. Growth: 5.0%; Avg 19>26:+7.5%, Real: +3.0%. They just account for 13.6% 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 was due to high 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 22 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, rose Oct, fell Nov, rose Dec, fell Jan. Jan $ were -0.1% vs 25. Avg: 4.5%. Plus, they are no longer all positive and just 34% of 19>26 growth is real. Growth: -0.1%; Avg 19>26: +5.1%, Real: +1.9%

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>Oct, up Nov, fell Dec>Jan. Jan $ vs 25: -3.2% (4.3% avg). Only down vs 25. Real $ vs 19 are again down. Growth: -3.2%; Avg 19>26:+3.4%, Real: -0.01%. They show the cumulative impact of inflation can be positive & negative.

Relevant Retail – Less Auto, Gas and Restaurants– They account for ≈60% of Total Retail $ in a variety of channels. Their only down month until Feb 25 was Apr 20, and they led the way in Retail’s recovery. Sales got on a roller coaster in 22, but all months set new records with Dec reaching a new all-time high, $481B, and an annual record of $4.81T. In 23, the roller coaster continued. A Dec lift set a new monthly record of $494.7B & an annual record of $4.997T. $ales got back on the roller coaster in 24. The ride continued as $ rose Oct>Jan 25, fell Feb, rose Mar>May, fell Jun, rose Jul, fell Aug>Sep, rose Oct>Jan 26. The Jan 4.4% YOY lift is 8% below their 92>25 avg of +4.7%, but they are all positive again and 54.2% of their 53.7% 19>26 growth is real, again #1 in Big Group performance, passing Total. Growth: 4.4%; Avg 19>26: +6.3%, Real: +3.7%. In 2024 their inflation rate dropped from 3.2% to 0.1%. It rose in 25 to 1.8% in Sep then slowed to 1.5% in Oct>Nov & rose to 2.0% in Dec>Jan 26. YOY Inflation is pretty low, but its cumulative impact can slow growth.

YOY inflation is low, but cumulative & impending lifts can affect sales. In Jan, 2 actual YOY $ comparison were negative, the same as Dec. In Oct>Nov, there was 1 real drop. That fell to 0 in Dec/Jan. In Oct, all were up vs last year with below avg lifts. In Nov only Auto was down but the lifts were all below avg. In Dec, all were up and Relevant Retl’s lift was above avg. In Jan, 3 lifts, all below avg. In Oct/Nov, 3 big groups were all positive. In Dec, there were 4. In Jan, they were back to 3. Relevant Retail has now been all positive in 19 of 21 months. As expected, Jan sales fell vs Dec, but the drop was 18% less than avg. Recovery is still slow.

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

  • Relevant Retail: Ytd Growth: +4.4%; Avg 19>26: +6.3%; Real: 3.7%. % Real Growth: 54.2%. All 11 were down from December. Vs Jan 25: 9 were up; 7 Real. Vs Jan 21: 10 were up; 6 Real. Vs 19: Dept Stores were down & real Bldg./Farm
  • All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 21. Sales are -66.3% from Dec and all YOY measurements but actual vs 21 are negative. Their -9.8% Jan YOY drop is more than double their -4.5% avg. Ytd Growth: -9.8%; Avg 19>26: -5.7%; Real: -7.2%. % Real growth: None
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -20.2% from Dec, but they are up in all comparisons. Their 3.7% YOY Dec lift is -57% below their 92>25 avg of +8.5%. Ytd Growth: 3.7%; Avg 19>26: +5.3%; Real: 2.7%. % Real Growth: 46.9%
  • Grocery- They depend on frequent purchases, so their changes are usually less radical. $ales are -3.4% from Dec and they are really down vs Jan 25 & 21. Cumulative inflation has hit them hard, especially vs 21. Their 1.9% YOY Jan lift is 41.9% below avg. Ytd Growth: 1.9%; Avg 19>26: +4.4%; Real: 0.4%. % Real Growth: 8.7%
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are -17.2% from Dec, but they are positive in all YOY comparisons. Inflation has been relatively low, so it is surprising that their +1.3% YOY lift vs Jan 25 is 75.5% below avg. Ytd Growth: 1.3%; Avg 19>26: +4.1%; Real: 2.7%. % Real Growth: 62.6%
  • Clothing and Accessories – Clothes mattered less if you stayed home. That changed in March 2021 with strong growth through 2022. Sales are -51.8% from Dec, but positive in all YOY measurements. $ales are +4.0% vs Jan 25, +23.8% above their 3.3% avg. Ytd Growth: 4.0%; Avg 19>26: +3.7%; Real: 2.7%. % Real Growth: 71.6%.
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation is up to 3.3% in Jan. $ are -14.5% from Dec and are only actually up Ytd vs 2019. YOY vs Jan 25, they are -3.5%, far below their 3.2% avg lift. Ytd Growth: -3.5%; Avg 19>26:+2.4%; Real: -0.09%. % Real Growth: None.
  • Electronic & Appliances – They have had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are -33.0% from Dec, but they are up in all comparisons. Strong deflation made real sales very high. Sales are +1.6% vs Jan 25, 23% below the 2.1% avg. Ytd Growth: 0.8%; Avg 19>26: 0.1%; Real: 3.1%. % Real Growth: 100+%
  • 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 again in Apr>Sep 25, dropped Oct/Nov, then rose to 5.4% in Dec & 5.6% in Jan. Sales are -11.8% from Dec but are actually up and really down for all YOYs. YOY sales vs Jan 25 were +2.3%, 76.5% below their 4.1% Avg. Ytd Growth: 2.3%; Avg 19>26: 3.5%; Real: -0.2%. % Real Growth: None.
  • 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 roller coaster since June 24 and $ are -44.1% from Dec. Only real sales vs 21 are down. YOY Sales vs Jan 25 are +2.8%, 12.4% above their 2.5% avg. Ytd Growth: +2.8%; Avg 19>26: +3.7%; Real: 2.9%. % Real Growth: 77.3%.
  • 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 -13.9% vs Dec, but positive in all comparisons. They are 2nd in the % increase vs 19 & vs 21. Plus, their 11.4% YOY Jan lift is 2.6 times more than their 92>25 avg of +4.4%. Ytd Growth: +11.4%; Avg 19>26: +7.8%; Real: 6.1%. % Real Growth: 74.1%.
  • 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 -23.2% from Dec and their YOY lift of 8.6% is -9.3% below the 9.5% avg. However, they are positive in all comparisons. Ytd Growth: 8.6%; Avg 19>26: +12.8%; Real: 11.0%. % Real Growth: 81.4%.

Recap – Driven by Relevant Retail, the Pandemic recovery was widespread by Y/E 21. In 22 we were hit with the strongest inflation in 40 years. Inflation has slowed considerably from its Jun 22 peak, but only 1 channel is deflating. Deflation helps, but cumulative inflation can still have a negative impact – slowed YOY growth and even sales drops. As expected, $ fell from Dec for all 11 channels. 8 of the 11 drops were below avg – Good! The biggest concern is still YOY drops and smaller lifts. Relevant Retail’s 4.4% lift vs Jan was 8% below avg. 9 channels had a YOY lift vs last year, the same as last month, but only 3 of the 9 lifts were above avg, down from 4 in Dec but far less than 7 in Oct. There are multiple factors slowing growth, but the major one is high prices from cumulative inflation. December is still the biggest retail month of year and January is the 2nd worst. Total & Relevant Retail had the most sales in history for both months. The Jan Yoy lift was -35% below avg for Total and -8% below for Relevant. The situation is a little worse than December as 8 of 11 channels had a below avg lift or a drop vs Jan 25. We’ll see what happens.

Here are the Dec/Jan 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 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 includes the CPI changes vs 21 to show cumulative inflation. Note: YE/Ytd is 2025 Annual & Includes October Estimates

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

Here are some answers to some obvious questions. Note: YOY Inflation slowed but changes by Channel were mixed.

  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.