E-commerce sales hit record. Sales at gas stations and electronics stores fell as prices fell. Used car dealers were faced with buyer strikes, new car dealers with delivery bottlenecks. Grocery store sales increase as prices rise.
By Wolf Richter for WOLF STREET.
First things first, the retail sales reported today by the Department of Commerce are based on revenue determined through a survey of approximately 5,500 retailers by retailer category. This is sales data from retailers – from a company perspective, not from a consumer perspective. It’s an indication of how good these companies’ earnings are. And in a moment, we’re going to dive into a ton of these sales charts by retailer category.
“Retail Sales” not “Consumer Expenditure”: The latter is reported about two weeks after retail sales, and my analysis of inflation-adjusted “real” consumer spending on durable goods, non-durable goods and services is here. By August, consumers outpaced inflation.
“Retail sales” here tracks sales of goods, not services, but raging inflation has shifted from goods to services – and services inflation is raging at its worst rate since 1982.
Inflation raged in services and cooled in goods on a monthly basis in September. Grocery prices were still skyrocketing — and we’ll see that in grocery store sales in a moment. But gas prices plummeted, and so did gas station sales. Used car prices fell, new car prices rose, but to a lesser extent. Electronics prices plummeted. The CPI for durable goods – new and used vehicles, appliances, consumer electronics, sporting goods, furniture, etc. – is down in September versus August (all my inflation details are here). For many retailers, price increases are now harder to enforce and enforce.
Therefore, the aggregate CPI rate cannot be applied to retail sales. Even if you try to apply the CPI of different categories of goods to retail sales, you will fail because retail sales go by retailer category and not by product category, such as a series of product categories. Some retailer categories are close to product categories, e.g. B. “Dealers for new and used cars and parts” or “Gastronomy and bar” or “Gas stations”. But gas stations sell all kinds of other products, including sodas and junk food, and the gas stations retail sales category counts sales of all products, not just gasoline.
Total retail sales after price declines in many product groups was flat at $684 billion in September from August, seasonally adjusted, and up 8.2% year-on-year. Compared to September 2019, retail sales increased by a staggering 32%.
Sales at new and used car and parts dealers, The largest category fell 0.4% in September from August to $128 billion, seasonally adjusted, but was up 5.6% year-on-year and 23% from September 2019.
The increases in sales since 2019 have come from much higher new and used car prices at much lower volume as the industry has faced huge supply problems.
Used car prices have fallen from their crazy peak and there is now plenty of supply on dealer lots as price resistance has finally set in. The number of used vehicles sold has fallen by around 15% compared to 2019.
New car prices continued to rise in September. Stocks of full-size trucks, which were depleted last year and early this year, are rising and some dealerships are overstocking and offering big discounts. Smaller vehicles with good fuel economy are sold out and there are long waiting lists, even for electric vehicles. So sales of new vehicles – down 19% in the third quarter compared to the third quarter of 2019 – are not yet being constrained by demand but by supply.
Sales at e-commerce and other “non-store retailers” rose 0.5% to a new record of $109 billion on a seasonally adjusted basis, up 11.6% year over year and up 71% from September 2019 as sales shifted from brick-and-mortar stores to online sites relentlessly continued.
This includes sales from brick-and-mortar retailers’ e-commerce operations, as well as from stalls and markets:
Grocery and Beverage Stores: Sales this month rose 0.4% to $79 billion, while the CPI for “eat at home” — which largely reflects food purchased from grocery stores — rose 0.7%. Year-over-year, sales rose 6.4%, about half the CPI for “eat at home” (13%). Compared to September 2019, sales increased by 24%:
Gastronomy and drinking establishments: Revenue rose 0.5% in September from August and 11.4% year over year to a record $87 billion. This increase largely reflects inflation: the CPI for “eating out” – restaurants, vending machines, cafeterias, sandwich shops, etc. – rose 0.9% in September vs August and 8.5% yoy, worst since September 1981
Compared to September 2019, sales increased by 33%.
Convenience Stores: Revenue rose 0.6% mom and 4.1% year-on-year to $59 billion, up 21% from September 2019. Walmart and Target are in this category, but department stores aren’t:
gas stations: Sales fell 1.4% this month, the third straight monthly decline, to $63 billion, the lowest since February, as the CPI for gasoline fell for a third straight month and from the peak 24% down in June. Revenue was still up 21% year over year and up 48% from September 2019.
Gas station sales include all other goods they sell such as groceries, beverages, motor oil, and other items. The fall in the price of gasoline may have been mitigated by increases in the price of these other substances.
Building materials, garden supplies and equipment stores: Revenue for the month was $43 billion, down 0.4% but up 9.7% year over year and 38% from September 2019:
Clothing and Accessories Stores: Revenue rose 0.5% mom and 6.4% year-on-year to $26 billion, up 18% from September 2019:
Various retailers (including cannabis stores): Revenue for the month was $15.6 billion, down 2.5% but up 8.2% year over year and 41% from September 2019:
Furniture and furnishing stores: Revenue for the month fell 0.7% to $12 billion and was up less than 1% year over year. Compared to September 2019, sales increased by 17%:
Department Stores: Revenue for the month rose 1.3% to $11.6 billion, up 1.8% year over year and 4.8% from September 2019, as large price hikes buoyed sales.
Since 2000, sales have fallen by 42%. Department store sales have moved from malls to the internet, including on the e-commerce sites of the few surviving department store chains:
Countless department stores and department store chains, from Sears on down, filed for bankruptcy and were mostly liquidated. Department stores were once the iconic place where Americans shopped. Today, few chains survive like Macy’s, and even they have been closing many stores each year for many years, and many malls that have not yet closed have boarded up department stores.
Americans have discovered that anything you can buy in a brick-and-mortar department store can also be bought online, including on this chain’s website.
In the early 1990s, department store sales accounted for around 10% of total retail sales. By February 2020, just before the pandemic, they accounted for 2.4%. In September 2022 they accounted for only 1.9%. On the road to insignificance:
Sporting goods, hobby, book and music stores: Revenue declined 0.7% for the month to $9.2 billion but was up 3.7% year over year. The CPI for sporting goods rose for the month but fell 1.1% year-on-year. Compared to September 2019, sales increased by 38%:
Electronics and Appliance Stores: Revenue fell 0.8% month-to-month and 8.6% year-on-year to $7.4 billion, even down from September 2019. Retailers in this category are grappling with price declines that are particularly severe for consumer electronics. In September:
- Consumer Electronics CPI: -0.6% month-on-month; -10% YoY.
- CPI Appliances: -0.3% MoM, +1.7% YoY
Only specialty electronics and gadget stores, such as Best Buy’s brick-and-mortar stores or Apple’s brick-and-mortar stores, fall into this category. It does not apply to the sale of electronics and home appliances at other retailers such as Walmart and does not apply to the sale of electronics and home appliances in e-commerce:
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