U.S. Retail Sales Report, Current Statistics, and Recent Trends
Falling Gas Prices Weaken Retail Sales in June
The U.S. Retail Trade Report is a monthly measurement of the U.S. retail industry. The U.S. Census Bureau publishes it. The Bureau surveys 4,900 firms each month to collect retail sales data. The report shows the total sales for the prior month. It also displays the percent change for that month. It reports on the percent change in year-over-year sales for the last 12 months.
U.S. retail sales rose 0.2% in November 2019, according to the U.S. Census Department. Online sales increased by .11.5%. Restaurant sales decreased by .3%.
Gas station sales rose by 0.7%. The Census Bureau doesn't adjust its statistics for inflation. Oil prices drive 60% of gas prices. As of December 10, 2019, the latest oil price forecast is for a continued suppression of high oil prices.
Department store sales fell by -0.6% in November 2019. Department store sales were down 6.8% since November 2018. That's due to strong competition from online retailers. Their sales were up 12.9% year over year.
Year-over-year retail sales were up 3.5%. A robust economy will generate annual retail sales growth of 3% or more. Most of that was due to stronger online sales, and growth in restaurant sales.
Retail sales hit a record of $3.68 trillion in 2018, according to data from the National Retail Federation and the U.S. Department of Commerce. That's better than the pre-recession high of $2.71 trillion spent in 2007. It's also a 40% increase from 2009's record low of $2.62 trillion.
Retailing is undergoing two significant shifts. The first is technological, and the other a result of changes in consumer behavior. Stores that understand and overcome both shifts will thrive. Retailers that don't will go the way of Circuit City, Borders, and Blockbusters.
Online retail has grown 300% between 2000 and 2018, according to the U.S. Commerce Department. During the same time period, department store sales have dropped almost 50%.
As of July 31, 2019, 7,567 retail stores had closed. That compares to 5,524 for all of 2018. The hardest-hit were Payless, Gymboree, and Charlotte Russe.
Although shoppers will never wholly abandon brick-and-mortar stores, they expect retailers to offer a convenient online alternative. Most stores are responding while still trying to get shoppers into their stores for pick-up of large items. They must use a combination of branding, service, and pricing to convince shoppers to get dressed, get in their cars and drive to pick up merchandise. As a result, retailers aren't as eager to build new stores. That hurts commercial real estate, neighborhood shopping centers, and jobs.
Amazon Go is a brick-and-mortar store offered by the world's largest online retailer. It could change the retail experience. There are no checkout lines or cash exchanged. The store is monitored by computer vision, sensor fusion, and artificial intelligence. Payments are automatically made by the customer's Amazon account using an app. But many cities are banning cashless stores. They say the stores discriminate against low-income customers who may not have bank accounts.
The other technological shift will occur in the years to come. 3D printing allows people to print small plastic and metal toys and other objects. Although the printers are too expensive right now to have much of an impact, over time they will become as affordable as cell phones. People will merely need to purchase or lease a software program that they download into the printer to produce whatever they want. Toymaker Hasbro has already partnered with 3D printer maker Shapeways to produce favorite toys.
The second is a change in consumer spending. The recession forced many people back to school to improve their job prospects. As a result, education loans rose while credit card use dropped. Shoppers underwent a shift to thrift. They sought deals and discovered that many low-priced items were just as good as more costly products. Retailers found they had to offer value in the form of higher service and convenience in addition to lower prices.
Off-price retailers are booming at the expense of department stores. Chains like Marshalls, T.J. Maxx, and Ross Stores have higher profit margins than Macy's and Dillards. That's because they are taking their customers and market share.
Expect to see more stores, like Home Depot, tie their online websites to their brick and mortar stores. That way, they can offer the best of both worlds: the convenience of online with the customer service of the local neighborhood shop.
Use the Retail Sales Report to Predict Economic Growth
Retail sales are used to predict consumer spending trends. That's because the report comes out monthly. U.S. economic growth, as measured by gross domestic product, is reported quarterly. Therefore, the retail sales report is a more current measurement of economic health. You can use it to predict GDP before that news comes out. Keep in mind that the retail sales report doesn't adjust for inflation, while GDP does.
About 20% of annual retail sales occur during the holiday season.
Keep in mind that GDP growth uses so-called real GDP figures. They eliminate the effects of inflation. The year-over-year retail sales reports use nominal GDP figures. GDP growth reports and YOY retail reports could have significant differences if inflation is very high or if there is deflation.
Pay attention to forecasts for specific holiday sales. The National Retail Federation surveys shoppers to find out how much they plan to spend on the major holidays. The report on Halloween spending provides early clues for the holiday shopping season. The NRF also reports on retail sales for Valentine's Day, Mother's Day, Father's Day, and Back to School.
U.S. Census Bureau. "Monthly Retail Trade," Download "Advance Monthly Retail Trade Report." Accessed Jan. 10, 2020.
U.S. Energy Information Administration (EIA). "Factors Affecting Gasoline Prices." Accessed Jan. 10, 2020.
U.S. Energy Information Administration. "Short-Term Energy Outlook." Accessed Jan. 10, 2020.
Federal Reserve Bank of St. Louis (FRED). "Personal Consumption Expenditures." Accessed Jan. 10, 2020.
National Retail Federation. "NRF Says ‘State of the Economy Is Sound’ and Forecasts Retail Sales Will Grow Between 3.8 and 4.4 Percent." Accessed Jan. 10, 2020.
Coresight Research. "Reviewing Year-to-Date US Store Closures and Openings." Accessed Jan. 10, 2020.
U.S. Congresswoman Ayanna Pressley. "PYMNTS: Policymakers Introduce Bills To Ban Cashless Stores In US." Accessed Jan. 10, 2020.
Shapeways. "Hasbro & Shapeways Enable 3D Printing Fan Art With SuperFanArt." Accessed Jan. 10, 2020.
S&P Global. "Off-price Retailers Forecast More Growth After Uptick In New Stores In FY'18." Accessed Jan. 10, 2020.
Bureau of Economic Analysis (BEA). "Consumer Spending." Accessed Jan. 10, 2020.
United States Census Bureau. "Why New Data on Durable Goods Matter," Accessed Nov. 29, 2019.
National Retail Federation. "Retail Holiday and Seasonal Trends." Accessed Jan. 10, 2020.