Retail Channel $ Update – March Monthly & April Advance

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In April, Commodities inflation vs last year slowed to 0.3% from 0.6% in March. Although radically down from its peak, cumulative inflation still impacts consumer spending. The YOY sales increase for April is below the 92>23 average (-20%) for Relevant Retail and for all but 2 channels. 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 March Monthly Report and then go to the April 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 March Monthly. All were up from February. Gas Stations were down vs 23 & Auto vs Mar 23 & 21. All other actual $ are up. We should note that Gas Stations are still selling less product than in 2019 but the worst news is that Relevant Retail is really down vs Mar 21, after 4 straight months of all positives. ($ are Not Seasonally Adjusted)

The March Monthly is $4.1B less than the Advance report. Restaurants: No/Chg; Auto: +$0.2B; Gas Stations: -$0.2B; Relevant Retail: -$3.9B. As expected, $ales were up vs FebruaryE for all. Actual sales for all but Auto &  Gas Stations were positive in all measurements. Gas prices turned up and their sales were down vs 23. Auto prices are deflating but $ were down vs March 23 & 21. There were 8 “real” sales drops, up from only 2 last month. Gas Stations had 4 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 53% of their growth is real.

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

Overall– All 11 were up from February. vs Mar 23, Only 5 were actually and “really” up. Vs Mar 21, 6 were up but only 3 were real increases. Vs 2019, Off/Gift/Souv were actually & really down. All others were up in both measurements.

  • 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 18.8% since 2021 which is having an impact. HomeCtr/Hdwe are only actually up Ytd vs 21 & 19 but Farm stores are only actually up vs 19. Despite strong deflation, all “real” measurements but Ytd vs 2019 are negative for both. Plus, only 22% of the overall Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.3%, Real: 1.2%; Farm: 5.9%, Real: 1.8%
  • 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 now actually down vs March 23 & really down vs 23 & 21 but 66% of their 2019>24 growth is real. Supermarkets had the biggest $ lift from February and all sales comparisons but “real” vs 21 are positive. However, only 10% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.4%, Real: +0.6%; Drug Stores: +4.8%, Real: +3.2%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 21.1% from February but their only positives are actual & real Ytd vs 23 & 19. Prices are still deflating, -2.2% 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 63% of their 43.4% lift since 19 is real. Avg 19>24 Growth Rate is: +7.5%; Real: +5.0%.
  • Gen Mdse Stores – Sales were up double digits for all vs February. All actual sales were up for Club/SupCtr/$ Stores. $ stores were only really down vs Mar 21. On the other hand, Disc Dept Stores were only actually up Ytd vs 21 & 19 and only really up vs 19. Plus, only 12% of their growth is real. The other channels average 46% in real growth. Avg 19>24 Growth: SupCtr/Club: 6.2%, Real: 3.0%; $/Value Strs: +6.7%, Real: +3.5%; Disc. Dept. Strs: +2.3%, Real: +0.3%
  • Office, Gift & Souvenir Stores – Sales are up strong, +10.0% from February 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: -0.9%, Real: -2.9%
  • Internet/Mail Order – $ are up 7.4% from February and set a new monthly record of $106.3B. All measurements are positive, but their growth is only 50.3% of their average since 2019. However, 82.5% of their 119.7% growth since 2019 is real. Avg Growth: +17.1%, Real: +14.7%. 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>Mar. All measurements vs 23, 21 & 19 are positive. They are still in 2nd place, behind the Internet, in the % increase vs 19 but fell to 2nd from 1st vs 21. Also, 76% of their 64.5% growth since 2019 is real. Average 19>24 Growth: +10.5%, Real: +8.3%.

March brought it’s usual lift. All channels – big and small were up vs February. However, the lifts were smaller as only 5 of 11 smaller channels were actually and really up vs March 23. Prices are now deflating in 9 of 11 channels but cumulative inflation is still a factor. Sales increases are lower as 8 of 11 channels were really down vs March 21. The Retail Recovery may be stalling. The commodities CPI slowed to 0.3% in April. Let’s look for any impact on Retail $ales.

April sales vs March only grew for Gas Stations, not surprising. A Mar>Apr Total Retail lift has only happened 5 times since 1992. However, the -1.0% drop is 48% less than the average of -1.9%. All actual $ measurements are positive vs 23, 21 & 19 for all groups but Gas Stations Ytd vs 23 and Auto vs Apr 21. The lift for all big groups vs April 23 were all at least 20% below their 92>23 Average. Inflation is still a big factor. The rate for all commodities, the best pricing measure for Retail, fell from 0.6% to 0.3% but is 15.7% vs 21. There is more “real”, but not good news. In March, 7 measurements were “really” down vs 23 & 21 and 3 came from Gas Stations. In April, 6 were still really down – 2 from Gas Stations. Relevant Retail’s real monthly sales vs last year have now been positive for 10 straight months, but after 4 straight months of all positives, their real monthly sales vs 21 are down again.

Overall – Inflation Reality – For Total Retail, inflation slowed but real sales vs Apr 21 are still negative. For Restaurants, inflation remains high, +4.1% but they are really positive vs 23 & 21. Gas prices rose and that group is still in turmoil. Auto prices are down but still up 13.7% vs 21 which has slowed actual & real sales. Prices are slightly up for Relevant Retail and their monthly real sales are again down vs 21, after 4 months of all positives. Their progress is slowing.

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, then down in April. Inflation fell and is only 0.3%. YOY sales growth is only 79% of the 92>23 avg. Sales are up 3.5% Ytd vs 2023, only 50% of their avg 19>24 growth. Monthly Real sales vs 21 are again negative and only 40% of the 19>24 growth is real. YOY inflation in Total Retail has significantly slowed but we see its cumulative impact. Growth: 23>24: 3.5%;Avg 19>24: +7.0%, Real: +3.0%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, setting an all-time monthly record of $96B in December 23 and exceeding $1T for the 1st time. They have the biggest Ytd increases vs 23, 21 & 19 and all real sales are positive. Inflation stayed at 4.1% in April but is still +20.8% vs 21 and +20.7% vs 19. 39.4% of their 51.5% growth since 19 is real and they remain 3rd in performance behind Relevant & Total. Recovery started late but inflation started early. Growth: 6.2%; Avg 19>24:+8.7%, Real: +3.8%. 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 in Feb>Mar, then fell in Apr. Actual & real $ vs Apr 21 are negative plus real Ytd vs 21. Prices vs 23 are -2.7%. Only 22.5% of 19>24 growth is real. Growth: 2.6%; Avg 19>24: +5.9%, Real: +1.5%.

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/Apr they were +1.0%. $ are up vs Mar but down Ytd vs 23. Pricing is a factor in the $ drop vs 23 but real $ vs Apr 21 & Ytd vs 21 & 19 are also down. Growth: -0.8%; Avg 19>24: +5.1%, Real: -1.0%. 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 and annual record of $4.997T. Sales fell in Jan>Feb 24 rose in Mar, then fell in Apr, which is normal. The -0.7% drop is 40% less than the 92>23 avg and the YOY lift of 3.8% is down 20% from avg. Also, monthly real sales vs 21 are again down after 4 straight months of all positives. However, 52% of their 42.5% 19>24 growth is real – #1 in performance. Growth: 3.8%; Avg 19>24: +7.3%, Real: +4.1%. This is where America shops. They finished 2023 and started up 2024 strong but in Mar>Apr their recovery may be slowing. This is concerning.

Inflation is still low, but the cumulative impact is still there. Sales increases are still small, which is very evident in April. It is also significant that there are 6 real drops vs 23 & 21, only down 1 from 7 in March. 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 are markedly lower and monthly real sales vs 21 are again negative after 4 months of all positives. Consumers are spending more $ and buying more product than in 23, but less than in 21. Progress has definitely slowed.

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

  • Relevant Retail: Growth: +3.8%; Avg: +7.3%, Real: +4.1%. Only 3 were up from Mar. Vs Apr 23: 6 were up, Real: 5. Vs Apr 21: 6 were up, Real: 3. Vs 19: All were actually up. Only Dept Stores & Furnishing stores were really down.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are down -5.3% from March. Their actual $ are only up Ytd vs 21 & 19. Their real numbers are all negative. They are even really down -9.4% vs 2019. Growth: -2.4%; Avg 19>24: +0.04%, Real: -2.0%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -5.8% from March, but they are positive in all measurements except real vs Apr 21. However, only 45% of their 34.8% 19>24 lift is real – inflation’s impact. Note: Ytd growth is now below Avg. Growth: 4.3%; 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 -5.5% from March but up for all except vs Apr 23. However, cumulative inflation has hit them hard. Real $ are down vs 21 and only 8% of the growth since 2019 is real. Growth: 1.5%; Avg 19>24: +5.3%, Real: +0.5%.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are -2.7% from Mar. Actual $ are all up and real $ are only down vs Apr 23. Inflation has been low so 65% of their 25% growth from 2019 is real. Note: Their growth is again below the 19>24 avg. Growth: 2.9%; Avg 19>24: +4.6%, Real: +3.1%
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales are down -4.2% from March but positive in all comparisons but actual & real vs Apr 23 and real sales vs Apr 21. Plus, 63% of their 19>24 growth is real. Growth: 2.0%; Avg 19>24: +3.1%, Real:+2.0%
  • 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 -6.4% from March and negative in all other measurements but actual Ytd sales vs 2019. They have sold less product in 2024 than 2019. Growth: -9.0%; Avg 19>24: +2.4%, Real: -0.4%
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are down -4.4% from March. Actual $ are up vs Apr 23 & Ytd vs 21 & 19. Due to strong deflation, all real sales are positive. Note: Their growth is now below their Avg. Growth: -0.2%; Avg 19>24: +0.7%, Real: +3.4%.
  • 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 16.9% from March but they are only positive vs Apr 23 & Ytd vs 21 & 19. Prices are deflating but still 18.0% above 21 so real sales are negative monthly & Ytd vs 21. Also, just 23% of their 19>24 sales growth is real. Growth: -2.5%; Avg 19>24: +5.5%, Real: +1.4%.
  • 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 -6.8% from March and down for all but Ytd vs 2019. The only positive real sales measurements are 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: -2.3%; 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 +4.1% vs March and are again positive in all measurements – actual & real. They are still 2nd to NonStore in the % increase vs 19 and vs 21. 70% of their 46% 19>24 growth is real but their current rate is still below Avg. Growth: +7.5%; Avg 19>24: +7.9%, Real: 5.7%.
  • 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 +2.0% from March. Their YOY lift grew to +12.8% in April but Ytd they are 35% below Avg. They are positive in all measurements and 81% of their 104% 19>24 growth is real. Growth: 10.1%; Avg: +15.4%, Real: +13.0%.

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 now deflating. This should help the Retail Situation. As expected, Sales fell from March. However, the drop was below average for many channels but he YOY monthly increase is also slowing. The 3.8% Relevant Retail lift vs Apr 23 was 20% below its 92>23 average 4.7% increase and 5 of 11 channels actually had a decrease. Among the 6 with increases, only NonStore & Misc. had double-digit lifts over 23. Inflation is low and now 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 March, only SupCtr/Club/$ & Electronics had a Ytd lift above their 19>24 Avg. In April, there were none. Relevant Retail is really down Ytd vs 21 for the 2nd straight month, after 4 consecutive months of all positives. The recovery has definitely slowed.

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)

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.