Retail therapy in bars and restaurants, cannabis shops and e-commerce? Other retailers are not so lucky.
From Wolf Richter to WOLF STREET.
Retail sales jumped 0.9 percent in April from March, after jumping 1.4 percent in March from $ 678 billion in February to 8.2 percent from a year earlier, seasonally adjusted, the ministry said today. of trade. Retail sales are sales of goods only, not services. And for months, we have seen a widespread shift in consumer spending from goods back to services, where spending collapsed during the pandemic but is now rising.
These retail sales today confirm this trend: despite shifting costs to services, consumers are still spending huge sums on goods, and retail sales growth is somewhere close to inflation, with “real” growth (adjusted for inflation) downward trend, as the cost of inflation-adjusted services more than offsets this.
Consumers are in a sour mood, but this has not reduced their costs.
Rising inflation has outpaced income growth for many Americans, and they are also shifting spending to services. Still, retail sales continue to grow, including in e-commerce. What is fascinating about the shifts is that there is a big boom in bars and restaurants, as well as in various shops, mainly cannabis traders – where sales far exceed inflation.
This jump in sales occurs even when consumer sentiment in May fell to its lowest level in a decade, according to a study of consumer sentiment at the University of Michigan. Overall sentiment was overcome by concerns about rampant inflation, which has spread to all sectors of the economy and is hitting consumers every day (data from the St. Louis Federal Reserve and the University of Michigan Consumer Survey):
Retail therapy? It’s as if consumers are trying to overcome the grief and anger of inflation with some classic retail therapy to feel better – and they do it in bars and restaurants, specialty stores that include cannabis stores, and e-commerce. Other retailers are not so lucky.
Sales at dealers of new and used vehicles and parts, the largest category of retailers, increased by 2.2% in April compared to March to $ 132 billion, seasonally adjusted, but decreased by 1.7% year on year. early. Second-hand vehicle prices began to fall on a monthly basis, although they remained much higher than a year ago, while new vehicle prices continued to rise at a record pace as new vehicle dealers were terribly low in inventory. And retail sales in dollar terms are the result of this mix:
Sales of e-commerce and other “off-store retailers” rose 2.1% seasonally adjusted in April from March to $ 107 billion, up 12.7% year-on-year. This is the second largest category of retailers and includes e-commerce operations of classic ordinary retailers such as Walmart:
Food and beverage stores: Sales fell 0.2% for the month to $ 77 billion, seasonally adjusted, but still rose 7.1% year-on-year, driven entirely by price increases:
Food services and places for drinking: Sales in these bars, restaurants, cafes, cafes, etc. jumped 2.0% for the month, seasonally adjusted, to a record $ 84 billion and 19.8% year on year. This growth rate is almost three times higher than the inflation rate of the CPI for “food away from home” (7.2%), which shows that people go out to scatter and enjoy and maybe flood their sour mood with adequate liquidity and are spending heroic sums of money to do so.
Ordinary stores: Sales were essentially the same for the month, at $ 57 billion, seasonally adjusted, accounting for only 0.8% of the stimulus fueled since April a year ago. Walmart and Costco are in this category, but not department stores.
Gas stations: Sales fell 2.7% for the month due to falling gasoline prices, to $ 62 billion, seasonally adjusted. On an annual basis, sales still increased by 36.9%, driven entirely by the jump in gasoline prices compared to the previous year.
Shops for building materials, garden materials and equipment: Sales were almost equal for the month, at $ 43 billion, for an annual profit of 1.7% from Stimulus Miracle April:
Clothing and accessories stores: Sales rose 0.8% month-on-month and 8.0% year-over-year to $ 26 billion, seasonally adjusted:
Retailers in various stores (including cannabis stores): Sales rose 4.0% for the month to a record $ 15.9 billion (seasonally adjusted), up 19% from a year ago. This category tracks specialty stores, including cannabis stores, which have become one of the hottest trends in retail as part of the black market business goes overboard:
Department Stores: Sales rose 1.1 percent for the month to $ 11.5 billion, up 2.9 percent from a year earlier. The increase in prices compensates for the decline in volume. Compared to the peak in 2000, sales fell by 42% as this store format fell out of favor with Americans, causing thousands of stores to close and many bankruptcies:
Furniture and home furnishings stores: Sales rose 0.7% for the month (seasonally adjusted) to just $ 12 billion, up just 0.8% year-over-year, despite price increases:
Sporting goods, hobbies, books and music stores: Sales fell 0.5% for the month to $ 8.9 billion (seasonally adjusted) and fell 5.4% year-on-year:
Electronics and Appliance Stores: Sales rose 1.0 percent for the month to $ 7.8 billion, seasonally adjusted, but fell 5.2 percent year-on-year. This segment covers only sales in specialty electronics stores, such as Best Buy or Apple. Electronics and appliances are a big business that is spreading to many types of retailers, such as general merchandise retailers and e-commerce, and the sales of electronics and appliances in these retailers are included in their segments (above).
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