The three account for 50% of retail sales. People blowing their disposable income that outran inflation by a wide margin this year.
By Wolf Richter for WOLF STREET.
Total retail sales rose by 0.3% in November from October, seasonally adjusted, even amid dropping prices of durable goods and gasoline that retailers sell, as inflation has now totally moved into services that retailers don’t sell. So adjusted for inflation, retail sales would have increased even more.
Compared to a year ago, retail sales rose 4.1%, despite the price declines in durable goods and gasoline.
The three-month moving average, which tamps down on the artificial drama of the monthly squiggles that can obscure the trends, rose by 0.3% and was up by 3.4% from the same period a year ago. All charts here show the three-month moving average:
But only some categories of retailers benefitted, particularly the big three that between them account for 50% of total retail sales: Ecommerce operations, bars and restaurants, and at auto dealers.
Other types of brick-and-mortar retailers are in permanent decline, such as department stores and electronics and appliance stores, because their sales are wandering off to ecommerce including their own ecommerce operations, and their brick-and-mortar stores lost out again. Sales at gas stations plunged because the price of gasoline plunged. And we’ll get to all those in a moment, each with their own chart.
Where does this money come from? It’s not a secret.
Per-capita disposable income, adjusted for inflation (total income from all sources minus taxes, adjusted for inflation), jumped by 0.3% in October and by 3.9% year-over-year, in other words, outrunning inflation by 3.9% year-over-year, after having falling behind inflation in the prior two years.
This is what consumers had left to spend on goods and services, and to save. And our drunken sailors, as we’ve come to call them lovingly and facetiously because they just refuse to stop drinking from the punchbowl, saved some of their disposable income and blew the rest.
This is what fuels the spending binge we’re seeing:
Retail sales by major segment of retailers.
New and Used Vehicle and Parts Dealers (22% of total retail sales):
Sales: $135 billion
From prior month: +0.5%
From prior month, 3mma: +0.2%
Year-over-year, 3mma: +5.2%
Ecommerce and other “nonstore retailers” (16% of total retail sales), ecommerce retailers, ecommerce operations of brick-and-mortar retailers, and stalls and markets:
Sales: $119 billion
From prior month: +1.0%
From prior month, 3mma: +0.7%
Year-over-year, 3mma: +8.6%
Bars & restaurants (“Food services and drinking places,” 13% of total retail). Our drunken sailors are going wild eating and drinking out, with double-digit year-over-year spending growth, spending a lot more at those places than at food & beverage stores, under the motto, YOLO?
Sales: $95 billion
From prior month: +1.6%
From prior month, 3mma: +1.3%
Year-over-year, 3mma: +10.0%
Food and Beverage Stores (12% of total retail):
Sales: $83 billion
From prior month: +0.2%
From prior month, 3mma: +0.2%
Year-over-year, 3mma: +0.9%
General merchandise stores, without department stores (10% of total retail):
Sales: $62 billion
From prior month: +0.2%
From prior month, 3mma: +0.0%
Year-over-year, 3mma: +2.4%
Gas stations got a boost from price increases (8% of total retail sales). Sales at gas stations move in near-lockstep with the price of gasoline:
Sales: $54 billion
From prior month: -2.9%
From prior month, 3mma: -1.0%
Year-over-year, 3mma: -7.0%
This chart shows the three-month moving average of the CPI for gasoline (blue, right axis) and sales in billions of dollars at gas stations, including other merchandise that gas stations sell (red, left axis):
Building materials, garden supply and equipment stores (6% of total retail). Pandemic bubble bye-bye:
Sales: $41 billion
From prior month: -0.4%
From prior month, 3mma: +0.3%
Year-over-year, 3mma: -4.0%
Clothing and accessory stores (3.7% of retail):
Sales: $26 billion
From prior month: +0.6%
From prior month, 3mma: -0.3%
Year-over-year, 3mma: +0.4%
Miscellaneous store retailers (2.2% of total retail): Specialty stores, including cannabis stores.
Sales: $15.4 billion
Month over month: -2.0%
Month over month 3mma: +1.1%
Year-over-year, 3mma: +3.9%
Furniture and home furnishing stores (1.6% of total retail). A big portion of furniture and furnishing sales have wandered off to ecommerce, with huge online retailers dominating the scene. This is what’s left over at brick-and-mortar retailers that specialize in furniture and furnishings:
Sales: $10.7 billion
From prior month: +0.9%
From prior month, 3mma: -0.5%
Year-over-year, 3mma: -8.6%
Department stores (now down to just 1.5% of total retail sales, from around 10% in the 1990s). Ecommerce sales by department store chains are not included here, but are included in ecommerce retail sales above.
Sales: $10.5 billion
From prior month: -2.5%
From prior month, 3mma: -1.6%
Year-over-year, 3mma: -5.3%
From peak in 2001: -40% despite 22 years of inflation.
Sporting goods, hobby, book and music stores (1.2% of total retail):
Sales: $8.6 billion
Month over month: +1.3%
Month over month, 3mma: 0.5%
Year-over-year, 3mma: -1.3%.
Electronics & appliance stores (1.1% of total retail):
Sales: $7.8 billion
Month over month: -1.1%
Month over month, 3mma: 0%
Year-over-year, 3mma: +3.9%.
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