US retail sales for the month of October pointed to gains ahead of the holiday shopping season and at a time when concerns about the state of the economy are said to be increasing.
The US Census Bureau of the US Department of Commerce reported that October retail sales of $694.5 billion increased 1.3% compared to September and grew 8.3% annually. And for the August-October period, retail sales grew a combined 8.9% annually.
Commerce reported that retail sales rose 1.2% from September to October and grew 7.5% annually, with restaurants and bars up 14.1% annually.
The Washington, D.C.-based National Retail Federation (NRF) reported its calculation of retail sales, which excludes sales for auto dealerships, gas stations and restaurants to focus on core retail, for a 0.7% increase from September and an unadjusted increase of 6.5% suggests full-year profit. In September, sales were up 0.5% month-on-month and 7.9% year-on-year.
And it added that NRF’s three-month moving average numbers rose an unadjusted 7.7% annually through October, with retail sales up 7.5% annually through October, keeping the results on track with NRF’s forecast and consistent with its forecast for retail sales in 2022 will grow between 6% and 8% annually.
“October’s performance is a strong foothold as we head into the holiday season,” NRF chief economist Jack Kleinhenz said in a statement. “Spending has gradually slowed but remains solid. Consumers continue to show resilience despite elevated inflation, rising borrowing costs and widespread macroeconomic uncertainties. As employment and wages rise and shoppers tap into accumulated savings, we expect the trend to continue. Early Christmas deals that have lured shoppers appear to underlie the October numbers and more promotions will be seen in November and December, which are historically the big Christmas shopping months.”
October sales rose in all but two retail categories on an annualized basis, led by online sales, builders’ merchants and grocery stores, and rose in five out of nine categories on a monthly basis. Features from key sectors include:
Online and other non-store sales increased 1.2% seasonally adjusted month-on-month and 11.8% year-on-year unadjusted;
Building materials and gardening stores grew a seasonally adjusted 1.1% month-on-month and 9.1% year-on-year;
Grocery stores grew a seasonally adjusted 1.4% month-on-month and 6.8% year-on-year;
Health & Personal Care stores were up 0.5% seasonally adjusted month-on-month and 5.5% year-on-year;
Apparel and apparel accessories stores were flat month-on-month in seasonally adjusted terms, but rose 2.5% year-on-year on an unadjusted basis;
Convenience stores declined a seasonally adjusted 0.2%m/m but rose an unadjusted 1.8% y/y;
Sporting goods stores declined a seasonally adjusted 0.3% month-on-month but rose 0.6% year-on-year unadjusted;
Furniture and Homes stores were up 1.1% seasonally adjusted month-on-month but fell 0.6% year-on-year unadjusted; and
Electronics and appliances stores declined a seasonally adjusted 0.3% month-on-month and 12.3% year-on-year.
In its retail holiday forecast released earlier this month, in which NRF defines the period between November 1 and December 31 as the holiday shopping season, the organization calls for a 6% to 8% annual increase to $942.6 billion – $960.4 billion. In 2021, retail sales grew 13.5% compared to 2020, likely due to the timing of the pandemic in 2020, to $899.3 billion, setting a new all-time record. Additionally, it said that holiday retail sales have grown an average of 4.9% over the past 10 years, with the caveat that pandemic-related spending has accounted for a large portion of those gains in recent years.
Not surprisingly, NRF expects e-commerce to play a significant role in holiday sales in 2022, with online and other out-of-store sales expected to grow between 10% and 12% and between 262.8 and 267.6 billion US dollars will be up from US$238.9 billion in 2021. What NRF said was largely driven by consumer e-commerce activity in purchasing holiday items, while adding that households are likely to will switch some Christmas shopping back to in-store shopping and what it describes as a more traditional Christmas shopping experience.
In a media conference call, NRF President and CEO Matthew Shay described 2022 as another historic year for retail and consumers amid challenging economic conditions with elevated inflation rates and rising interest rates playing a role in how consumers behave.
“With these challenges and the uncertainty pervading the broader economy, consumers are taking things a little more thoughtfully and cautiously, but… continue to spend on budget priorities,” he said. “The fact that they’re continuing to spend makes sense given what’s happening in the labor market, job growth, rising wages and how consumers are making up the difference between their monthly expenses and income through savings and in some cases take on additional loans and debt.”
Additionally, Shay highlighted how retail sales since May 2020, 60 days into the pandemic, have shown consumers have been consistently driving the economy. He went a step further, saying retail sales grew 7.2% annually through the first nine months of 2022, consistent with the NRF’s forecast for calendar 2022 of 6% to 8% growth.
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Jeff Berman, Group News Editor Jeff Berman is Group News Editor for logistics management, Modern conveyor technologyand Supply chain management review. Jeff works and lives in Cape Elizabeth, Maine, covering all aspects of supply chain, logistics, freight transportation and material handling on a daily basis. Contact Jeff Berman