Online sales jumped 37% in Q3, after 44%-Spike in Q2. Online food-and-beverage sales up 160%.
By Wolf Richter for WOLF STREET.
Ecommerce retail sales jumped 37% in the third quarter, compared to a year ago, to $210 billion (seasonally adjusted), after skyrocketing 44% in the lockdown-inspired second quarter, according to the Commerce Department today.
Ecommerce sales have more than doubled over the past four years. Sales in Q2 and Q3 blew past last year’s Q4, the holiday-sales quarter that normally nothing comes close to until the next holiday-sales quarter – and this simply hasn’t happened before:
Clearly, the explosive burst of ecommerce in Q2 that no one had been prepared for and that had bogged down supply chains and the ecommerce fulfillment infrastructure and the delivery system has backed off a tad, but even after backing off a tad, that 37% year-over-year jump in ecommerce sales in Q3 was the largest such jump since 2002 (while the 44% year-over-year jump in Q2 had been the highest ever recorded). This compares to average year-over-year growth rates since 2012 in the 15%-range.
During the panic of the Financial Crisis, ecommerce sales experienced three quarters with year-over-year declines, as total retail sales plunged. But not during the Pandemic – the Weirdest Economy Ever – when retail sales rocket to new highs, powered by the explosion in ecommerce sales:
Ecommerce includes the online sales of all retailers, including Walmart, Costco, Target, and Macy’s, when these sales are initiated and paid for online, regardless of how the merchandise gets into the house, either through delivery or some sort of customer pick-up at the store.
Walmart reported this week that in the quarter ended October 31, ecommerce sales at Walmart U.S. soared by 79% year-over-year and at Sam’s Club by 41%, even as traffic in its brick-and-mortar stores declined, with people making fewer trips and shifting more of their spending online. Target reported a blistering 155% gain in its ecommerce sales in the third quarter. Not all retailers hit it out of the ballpark in ecommerce, but many did.
Ecommerce sales accounted for 14.3% of total retail sales in Q3, after having hit 16.1% during the lockdowns in Q2, up from what was the prior record of 11.8% in Q1, having compressed the market-share gains of several years into two quarters:
Total retail sales include a lot of things that are online-resistant, such as gasoline sales and new vehicle sales (franchised dealers are somewhat protected by state franchise laws), Tesla being an exception since it doesn’t have dealers. But used vehicles are now being sold online in larger numbers.
By “experimental” category.
The Census Bureau began an “experimental” data series last year about some of the sub-categories of ecommerce sales. The data only goes back to Q1 2019, and is not seasonally adjusted, but it shows some interesting dynamics.
Online food-and-beverage sales in Q2 had shot up by 100% from Q1 and by 220% year-over-year, to $7.1 billion. In Q3, people started going to grocery stores a little more and backed off just a tad from buying this stuff online, but online sales of food and beverages in Q3 were still up 160% year-over-year:
Online sales of furniture and home furnishings had jumped 61% year-over-year in Q2. In Q3, these sales dipped to $4.1 billion, but were still up 49% year-over-year:
Online sales of motor vehicles and parts in Q3 rose by 19% year-over-year to $12.3 billion, and by 39% from Q1 2019:
Online sales of building materials, garden equipment and supplies, in Q3 dipped to $6.8 billion – after the huge spike in Q2 – but were still up 70% year-over-year:
Online sales of clothing and accessories include work-related clothing that suddenly, due to work-at-home or no-work-at-all, took a hit. And the category includes things like party dresses for which there was suddenly less need. But other categories thrived, and so this is a mixed picture, where sales had hit a high in Q4 2019, and as expected seasonally, dropped sharply in Q1, but then didn’t explode higher in Q2 and Q3 but followed what looks like normal seasonality. Nevertheless, year-over-year, online clothing sales were up 56% in Q2 and 33% in Q3. Those are still huge gains:
Earlier this week, the Census Bureau reported monthly “advance” retail sales by category of brick-and-mortar retailers for October. It includes a metric for “non-store retailers,” which partially overlaps with ecommerce but also covers other vendors, such as market stalls, door-to-door sales, vending machines, and mail-order houses. And in October, after dipping and wobbling in the prior three months, sales at these non-store retailers rose by 3% from the prior month to a new record.
The explosive burst of ecommerce in Q2 that had tangled up the supply chains and delivery systems in the US is unlikely to be repeated in Q4. But the new restrictions being phased in across the country, and the new concerns causing people to think twice about heading to the mall – the diminishing number of people still wanting to go to the diminished number of stores still operating at the malls – are going to add fuel to ecommerce sales.
And the seasonality of holiday-sales, amid the new-normal of this shift to ecommerce, should produce another blow-out quarter for ecommerce and a further market-share grab from brick-and-mortar stores, to finish off a year that compressed three years of ecommerce gains into one.
My 13 whiplash-charts by retailer category. Read… Stimulus Fatigue? Retail Sales Wane at Many Brick & Mortar Stores. Department Stores Progress to Zombiehood. But Online Sales Surge to Record
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Maybe this is what Dotcom bubble predicted, everyone with a webpage will survive others will perish. Somewhat twenty years ago. Now, I will predict for now and the next twenty, housing or land for housing will be so hot. Housing is needed as an alternative office. Land and house investments always thrived. In troubled times, land, gold and physical cash can easily win over stocks, paper wealth and treasuries. COVID is a troubled time and the winners are more traditional. If you have no disposable cash, invest in gold, savings and land everything is superficial.
Why e-commerce is winning? Because, the wings and legs of regular retail is broken by COVID. People need food and produce to survive. Food and Beverage (not just tea and coffee).
Recently Bill gates predicted that half of regular business would die after the COVID. Good that the apply guy already died before these…
I am a little dubious of the on-line retail sector as an investment. If you look at Walmart and Target their net income is about where it was ten years ago, but the shiller PE is 30 for walmart and 37 for Target. They are both overpriced by at least 2X except in a zero interest rate world.
Hypermarkets have trouble competing with supermarkets when everybody buys their mall stuff online. I see trouble for Walmart etc.
Walmart is the #2 ecommerce retailer in the US, far behind Amazon. Walmart is very aggressively going after the online market, belatedly. It finally understands where the music plays.
True, but i claim that their legacy business is sub optimal. That smaller supermarkets that are closer to their customers and don’t ave to carry the (loss-making) mall part of a hyper-market
“Housing is needed as an alternative office.” Really?
Everyone (except homeless) already has a dwelling (house or apt) already, and most of us do not live in hovels.
Therefore, this meme about “COVID is scary– I must work from home and avoid people– but only a large, expensive suburban house with lots of rooms will suffice for working safely on my home computer” is only a silly narrative, and one, I think that has no legs in long run.
One day COVID crisis and its economic effects will be in the rear view mirror, so the economy will return to its pre-COVID configuration (albeit in even more fragile and unstable condition than now).
Future of e-retail growth is murky at best. Many known and unknown variables could easily take wind out of its sails, including a dramatic rise in fuel and shipping costs (the sight of a fleet of Amazon and other company delivery vans scurrying around your neighborhood may be a nostalgic memory soon).
A lot of homes don’t have the space to have a functioning office. And a laptop on the kitchen table is not a functional office.
Pre and Post times are different. For one i doubt a lot of bars & restaurants have been open in the last 6 months. This will effect that sector for years to come. A lot of B&M retail closed sooner than expected. This didn’t give malls time to find replacement and creates ghost malls.
To correct my prior comment: I did not mean to imply that the US’s rule of law is intact. Already, I must tell people unfamiliar with LA county that the laws of California are not always respected by the judges there. I try not to practice there anymore, since too many judges there are never punished even when they regularly, willfully disregard the written laws: e.g., regularly striking complaint provisions for attorneys’ fees or punitive damages that the legislature authorized.
In one important case, I actually tried to get a woman who I had heard was a judge’s girlfriend to associate into the case, so that the ever present cronyism would work in my favor. It is fortunate that the rest of the Southern California counties all appear to be overseen by honest, by-the-book judges. Scholar’s speculated that many empires and nations have fallen as a parasitic elite gets growing power and is above the law, while the majority of the population is oppressed and parasitized. That maybe our future, but it has not yet arrived — except in LA county state courts.
“A lot of homes don’t have the space to have a functioning office.”
Maybe, or maybe not.
But I spent a major portion of my career (IT) being productive in a small office cubicle with phone, PC, and small printer. I didn’t know then I was being deprived.
I never implied that it had anything to do with rule of law. It is simply true that a lot of mall shops have been slowly dying because of internet. They survived on cash flow and depreciation. They have no future and need a cash infusion for the new season. But that money will never come back so they are all close now instead of being spread out over a decade. Thus creating ghost malls.
A cubical plus storage space is a surprising amount of square of square foot. You may be housed in such a way that you have that space but most people don’t.
Sadly, I fear that you are correct. These small to medium sized businesses will continue to fail while on side tries to get massive aid to states and hospitals and other fights to prevent it. (I rapidly bought Amazon stock at the beginning of the year, so I made out like a bandit.)
At least, we just avoided a Zimbabwe moment thanks to the responsible, Michigan GOP leaders: nothing scares foreign investors more than governmental instability. The US’s greatest assets are not its massive natural resources nor the abilities of its population (whose youth is receiving worse and worse education and less desperately needed food assistance.)
The US’s greatest assets are its rule of law and its respected, democratic government, so that changes of power can occur without bloodshed and with fewer spoils being obtained by the winning side: mainly just government jobs and some favor in federal contracts. If we lost those, I fear that the decline of the US dollar will be greatly hastened and our allies will slowly, one by one, abandon us. Already, I fear that Germany has gotten to much into China’s economic honey trap (dependent on the profits that its automaker’s derive from their China investments.)
Those allies have lifted us, e.g., by allowing their populations to continue buying our rapidly printed, monopoly-money, treasury bonds. Thank Xi for his instability and megalomania: he is discrediting the CCP gang, so our allies may hesitate to buy Chinese-mainland bonds.
M, you believe in fairy tales.
The US is a country with an unbelievable crappy constitution in which it population is so propagandized that they think it is the closest to perfect a not by god inspired text can be. Its people don’t really have any power and its empire was the most brutal and anti-democratic in the last century. And the US does not have allies but underlings.
ps. What instability is Xi creating? I don’t see any expect being the greatest power which i don’t find weird being the country with the largest population.
Hopefully you do not live in the usa, as the pain it would cause you to submit to the will of their government is a burden no one should shoulder. I wish you well in utopia, and may you send us directions that we might follow.
I would agree with you in many criticisms leveled at our country: e.g., even the British, whose racist, oppressive empire caused the deaths of so many millions of people of other groups are progressing faster than we are. We are in deep trouble and have a bankster-parasite infestation that is sinking our economy.
However, please do not ever compare us to Xi’s communist China. I can only assume that you have limited information and distrust the US media reports.
However, trust me, and please read about the Uighur concentration camps, Tibetan/Hong Kong abuses/mistreatment, force organ harvesting (A.K.A. genocide) of religious dissidents/other races, etc., etc., etc., etc. They are not fake news. Xi (and his regime) is the “greatest” only in the same sense that Genghis Khan or Timur Lang or Stalin or Mao or Hitler or Pol Pot (or their “regimes”) were “the greatest.”
I have handled immigration and other cases, so I have met many people that know exactly what has gone on in Xi’s China. It has gotten even worse since Xi took power. What they say in private, after asking you never to tell anyone, to vent, (because so many clients seem to believe that lawyers are like priests and take confessions) makes me now never even want to even get off the plane in any Chinese airport.
Things were already troubling years ago. I found myself for hours in a Chinese airport some years ago, because the person who booked my trip to Asia did not check with me and I negligently did not read the tickets carefully. I nervously paced that airport for hours on a delayed layover expecting their secret Gestapo/KGB to jump out at any time, and arrest, torture, then kill me for past criticisms of the commies.
What has scared me is not what is in the 15-billionaire-owned, US media nor even what has been told to me in private (as their attorney) by persons who have no reason to lie to me and have made me swear never to tell a soul. What scares me is what I see in their faces and in their body language: stark terror.
Do not tell me that the CCP’s China is a normal country or anything but an Orwellian, oppressive, nightmarish, horrifying country that is most similar to history’s past Soviet Russia or the Nazi empire or the Aztec Empire. People safe and living in the USA go pale like sheets, shake like leaves in terror, shut up suddenly, refuse even to talk in a private room with the door closed, and turn away if you just show them videos of what happened in Tiananmen Square or what is happening with organ harvesting or anything about the Falong gong, etc., etc.
They will not say a peep about what they suffered publicly for fear of what will happen to relatives in China if they speak. Many will not want to even detail everything in papers asking for political asylum!
Those who asked why did the Germans allow the Holocaust and why did so many companies continue doing business with the Nazis after their atrocities can now be answered with this question. Why do our companies, those that are owned by wealthy persons from the US, Germany, Japan, and other now “civilized” countries, keep investing in Xi’s China after knowing of their atrocities?
The same reason answers both questions: absolute avarice and unquenchable, pathological greed. They do not care if their products are made by slaves and their CCP business partners’ hands are effectively covered in innocents’ blood. I dream that I would have had the courage, if I lived in Nazi Germany or Soviet Russia to speak up.
At least, safe for now in the USA, I can dispute your claims. I also now never buy the very pretty “tablets” and other products made by US companies in China.
You truly do not know what is going on in Xi’s China if you are being honest and not sarcastic. He is still way behind the premier, “greatest” mass murderers of history, e.g., Mao, Stalin, Genghis Khan, or Hitler in body count. However, I am sure he is working diligently and will catch up, if he remains in power long enough. (Now, having said that, I will have to always book my own flights to Asia from now on.)
Nothing to do with trump
It would be more useful to understand overall sales.
Online sales increasing but overall sales being down – doesn’t signal a healthy economy.
Might all have less to do with the general economic state of health and more of a massive underlying social fracture which is now revealing itself in a split. To wit, those who trust not in the e-conomy may be withdrawing from all 1st-tier spending, with some percentage shifting entirely to 2nd-tier “retail stores” (they started to de-emphasize the thrift word years ago and began to carry new merchandise and 1st-tier “salvage”). The gap might continue to grow aided by every security breach that makes people leary of electro-world. Who knows?
+10 Our family has probably not bought more than two items of new outerwear, per person, in the last ten years. Everything else is available in thrift stores. Quality is far better than new, items no longer made can be found, and sometimes spectacular finds, like a full length men’s wool coat, tailored in London, for ten bucks.
Prices are only going to go up and supply lines destroyed, so now is the time to convert money into real goods that you might need later.
Also, other than energy and food, or a big building project, garage sales, stuff sold, or given away, listed online, see “Freecycle” or Craigslist, are sources of many other things you might need.
That stuff that’s been sitting around in your basement you’ve hoarded since the 1970s? You’d be amazed at how much you can get for it on Craigslist. Cash is King!
Services? When you pull out a wad of bills you’d be amazed at the discounts offered, if you ask for it.
I maintain, this is a nonlinear, tsunami-like surge we are riding along on, heading towards the shoreline — but when the energy in this wave fades, the liquidity surge will reverse directions. There is a flip-side in this cyclical event.
I’m not trying to be poetic, but this synthetic economic energy surge, put in place to save to economy, is causing long-term, lingering structural damage. Millions of jobs will be lost and replaced by this euphoric wave and as entire cities are shut down, people are reexamining fundamental existence, adapting to entirely new ways of living. It’s no surprize that online sales are exploding, but how will ghost town cities transform themselves now that people see the value of virtual existence?
In the near future, More strip malls and less malls is biggest way. Most stores will lose out to the big stores like Walmart and Costco. Restaurants, could be bigger (more numerous) and fill the gaps left by lost stores or not (this is the bigger question I have right now). Vacant, previously filled commercial real estate, could be replaced with a combination of housing, parks, or being simply demolished. Overall, housing takes up the large majority of a city and although, you see it alot, commercial land, typically, is less of a city than you think. Odd small gaps between commercial buildings (because of demolitions) could be filled in with trees or other stuff. In some cities, you may see small apartment buildings or houses spring up in random Spots. Ideally, cities would pay (in form of tax rebates, also acting as subsidies) companies to move to new spots, so that whole blocks of unused office buildings could be demolished at a time. All this assuming work from home is permanent.
Long term, the question is less certain. People moving away from the largest cities is the only likely thing that can be predicted.
Interesting theory, but in reality cities are pretty resilient. The Great Plague of London was 350 years ago and London was continuously inhabited the whole time. There might have been an exodus to the country, but it was no biblical scale exodus causing a general abandonment of London. They came right back after the plague.
Much like today it was the wealthy that left London during the plague and the following year the city was destroyed by the great fire. Maybe that was a good opportunity to rebuild a better city.
I visited the office in London this week. It was very quiet. I’m sure it will come back but for now it is clear there will be too much retail and office space. It is probably hard to value real estate right now. Short term effects v long term. Caveat emptor.
“The Great Plague of London was 350 years ago and London was continuously inhabited the whole time.”
Yeah, but the internet was so slow back then…
London is much more significant to England then nyc or Los angles is to America. Large cities in the 100,000 to 500,000 (100,000-300,000 more likely) range could actually grow, but, cities like NYC could be hit hard off work from home becoming permanent. NYC is a popular destination for the worlds dirty money and this hugely inflates the price of everything. American cities and European cities are laid out differently and cannot be directly compared. The lack of needing to commute to work could benefit some large cities, particularly, smaller ones.
After the pandemic, we will see employers look farther for cheaper employees, this will be the big blow for cities like NYC. As the cost of living is far too high to be sustainable.
Thomas Roberts, ‘London is much more significant to England then nyc or Los angles is to America’
At least L.A. has rail, a port, trucking, refineries, industry, what’s left of Hollywood and tourism.
A city like San Francisco, is not important to the nation at all, because of decades of political decisions and putting what few eggs there were in the wrong basket.
Corporate headquarters? Chevron, Bank of America, Charles Schwab, Pacific Gas and Electric, just the tip of the corporate iceberg of companies fleeing the city’s political, street and taxation climate.
Airport, located in a different county, 30 miles away,
Tourism? Without air travel and cruises, the only way touri can arrive is by car and since the nation knows about the 36,000 car break ins a year, with practically zero successful prosecution, coupled with the incredibly high parking prices and parking taxes,that’s not favored.
Fine dining? Shut down, and even when opened, large numbers closing down because of A.D.A., regulations, parking requirements, supplemental taxes etc.
What’s left? Thousands of hard core homeless who cost billions and are not leaving. An ever shrinking small business base with more and more tax feeding tubes inserted into them. i.e. The Mayor, makes more money than does the U.S. president.
San Francisco, like once fabulously wealthy Argentina, is going to go from First World to a developing nation city very soon.
London and its elite rule the UK. The same is absolutely not true of NYC and the other large cities and the USA
People are leaving the ‘cities’ and moving to the ‘suburbs.’ Not really any different. They’re remaining in the same metropolitan areas.
But, a different tax base and fiscal regime.
The move from the largest cities is only temporarily, the death of small towns (not suburbs) who loose their mall retail is forever Especially when logging and farming is done remotely with 5G
Things are changing for sure.. Lots of people gardening and canning. My wife and I can and preserve so I had a good supply of canning lids.. But we were running thru them. So I called all the local stores, searched on line and other than incredible gougers, I couldn’t find any until recently and I had to buy in lots of 100 to get them at a reasonable price.
I am also a gardener. Years ago I quit growing starts in my small greenhouse and was buying them because of laziness and travel.. But this year, many of the types just weren’t available. Really unusual. Peppers were the worst. I got a few but not some I usually grow. So I decided to buy seed again this fall for next year.
3 of the Oregon Washington seed producers were “Sold OUT!”.. I had to order from 3 different sources and still looking for some types of peppers. And the onion sets, not seeds, sets, were unavailable as was garlic from local suppliers so I had to get some off ebay and I have no idea what I actually got.. although they are sets. Onions come in short duration and long duration. Short don’t store but planted in late winter give you onions in late spring.. Long, plant in late winter and harvest in fall..
We’re hoping to have the vaccines eventually. So far, we just have preliminary results without further details, published by press release, instead of peer-reviewed detailed report, and lots of unanswered questions.
That means that if I take both, it’ll be 190% effective, right?
Max 110% effective. Fact. Science.
At the biggest mall in my part of the state, which I’m at about once a month during off hours (Tuesday afternoon, usually). Right after the lockdown ended, it seemed like it would be back to normal there pretty soon. However, the number of people there have been consistently plummeting every month. Like most malls, it’s almost entirely clothes, some services (haircut, massage parlor, and the like), and a food court. Clothes sales aren’t so hot right now as far as I can tell. And people would rather go to strip malls for haircuts, restaurants, massage parlors and the rest. People seem to be very uninterested in getting in and out of the malls twisting parking lots and long corridors. Because, I’m there during off hours, it’s hard to say if it accurately represents true attendance.
But when tsunami is heading towards the shoreline the tide goes out at first. What we have is the addition of half-Trillion-dollar car company to SP500 ETFs. After it made 139K cars last quarter. Sell it all to Joe Six-Pack, for retirement.
They are not even pretending anymore.
Clearly Drama Theater for the masses. We’ll be lucky to see tangible (something that will help you or I) results by summer. Which will put us near the 18 month forecasts of last winter.
ps Health Professionals; a big thank you for your dedication & sacrifice. You have not been forgotten. (I am not associated with the medical industry.)
Keep up the stellar work Wolf!
Alright, we’re going into full survivor mode; where are the online guns and ammo data? I heard that’s going through the roof. I also note that toilet paper and paper towels are off the shelves again in many places, Costco had signs out indicating they were out.
I wonder if that list is going to get longer as we head into 2021.
Things are so weird these days, and we have a curfew going in soon, which just makes no sense at all. I wonder if protesters are exempt.
I have to laugh at this US idea that guns and ammo are of some use in an economic, societal collapse.
Do they think there is going to be some ‘high noon’ draw? The bad guy or whoever can just draw a bead from a quarter mile away…
It resembles the Hatfield and McCoy feuds or on a much larger and more recent scale, the Sicilian mafia feuds. One of these began with a goat finding a hole in a fence and eating someone’s tomatoes or something.
After five years half the males of each family were dead. But jees, they were tough!
Every day, some wife shoots her hubby or vice versa. or some kid shoots his brother, all because the family had guns in the house for protection.
The safest safety is a society not swimming in hand guns or assault rifles.
I am Canadian, have owned many guns, no hand guns or assault rifles and have probably done more hunting than the most NRA types.
George Bush I left the NRA.
Yep, when the inevitable zombie apocalypse comes, we will see who is better prepared.
Oh crap, I don’t own a gun….
Gun is the easy buy.
Its the ammo that is getting scarce.
Blame it on William Shatner, and he’s a Canadian!
At least there hasn’t been any school shootings since the pandemic started.
Good point, there is a way to curb mass shootings…. in the US, keep the place locked down.
Lock down can be a cure for lots of things it seems. Let’s keep it going to see what other good things it could do.
Good comment Nick Kelly, (but I’m biased).
There is a hybrid option to buying online, and that is use it for research and pricing and then talk to a real sales person when applicable.
Our house needed to replace stove, fridge, and range hood. These are all big purchases with expensive implications if we get it wrong. Being rural I immediately started to research online options and soon discovered all major store offerings were just working as middlemen from factory to home, and not actually doing anything. In fact, Home Depot tacked on a $58 delivery fee to the store. I then contacted the sales department at a local reputable (great reviews) furniture and appliance store. They offered me better prices than online retailers for the same models, and the availability date for pickup is earlier. Any warranty issues will be addressed through the store, including pickup or home repair if necessary.
Instead of talking to some (impossible to understand) person in Montreal or New Brunswick, (after navigating the voicemail menu options), or simply buying blind online, I dealt with ‘Patti”, a real person who phones back, discusses options, and emails receipts with a personal message, and all for a better price!
” I also note that toilet paper and paper towels are off the shelves again in many places, Costco had signs out indicating they were out.”
That jives with my most recent trip to Hy-Vee grocery store. Paper towels were very few on shelves and ‘Limit 1 Package’ to customers were placarded prominently. But other store items seemed to be normally stocked on shelves.
But I was gobsmacked by what was in a lot of shoppers’ carts. Many were filled to brim (and one knows how large and spacious shopping carts are these days) with processed packaged food and junk food items. I’ve never noticed that before, ever, not on that scale. Anyone else had a similar observation lately?
Seems like folks are stocking up for living high on the hog (and like a hog) for a COVID winter.
What’s the deal with Mnuchin calling in half the Fed alphabet soup?
I thought the mandate was to keep printing money no matter what?
One final *rump card. He’s been saving it ;)
I bought some cheap HYG puts when I saw that, but they may reverse course quickly.
How much of that is price inflation versus increased quantity of sales?
Am I looking at e-commerce sites crushing it, or the dollar losing value and everything getting more expensive, or some combination of the two?
I see investors in on-line and EV making the same mistake unless they are protecting themselves in some way. The prices of both are based on an sustainable growth rate. There is a finite market for retail goods and a finite market for autos. Once the growth eats most of the pie then price to sales is around 1 or less.
I shopped on Amazon and Google websites. I also bought things at Walmart three miles away to avoid the shipping costs. I try to limit myself to one Walmart shopping trip a week. They require face masks. A nasty virus has filled hospitals. People in some states searched hundreds of miles away looking for medical care.
I learn a retail store stores layout and then I am a loyal customer. Used to be Walmart. Now I only go twice a year or so. Too big and too crowded. I try to limit my time in a retailer to 5 or 10 minutes. It’s Aldi, Dollar General and Lowe’s Hardware.
The increase in e commerce may open opportunities in warehouse real estate. They need big covered spaces close to transport hubs (sea, rail, road) and accessible to their work force.
We’d have seen a similar jump in beam-me-up transporter revenue had such a technology existed. Isolation enabling products are popular. What are the numbers on RealDolls sales?
[Online food-and-beverage sales up 160%.]
How much of that is alcoholic beverages I wonder?
Has anyone else noticed that the direct to consumer cash stimulus has created some chaos in the supply chain? For example, I’ve had a Spa motor on backorder, along with dozens of other customers, for about 4 months. Also the specific “ReNew” chemical this Spa requires is almost impossible to find. Why? Because when you send $1,200 to every adult in America, turns out many of those adults go out and buy a Spa. So beware when the next stimulus arrives, be it one-timecash payment or a monthly UBI, it will have an impact on the natural flow of products and processes via the manufacturing supply chain.
So direct cash injections can cause instant distortions, yet having the govt forgive say student loans, that does not work very well to stimulate instantaneous consumption. Think about it, if you get $200/month forgiven for 20 years, that means maybe you have $200 to spend on vape products or something under $200 monthly, but you do not get the $50,000 sent to your bank account, it is instead used to pay off debt (thus where is the stimulus?). So as much as you hear that forgiving $50,000 student debt will be a GPD miracle, seems rather illogical…
Once the next stimulus checks get sent to every adult in America, certain “things” could get hard to find. Printing money is a perversion of the natural order of monetary systems. I’d expect the unintended consequences to get even more unpredictable as the stimulus VuDoo capitalism increases over time.
Supply chains for goods and raw materials are a total mess. Like freeway traffic, those slowdown won’t just dissipate, they’ll magnify. The ecommerce data is also skewed due to the usual big players and price inflation. Amazon etc. can absorb or bribe their way through the supply chain issues by substitution and pushing returns onto producers. Smaller businesses may indeed be selling more, but cancellations and returns will kill many of them no matter. Party on prime!
I often wonder if the people at the beginning of the chain, say the spa chemical workers, are on the job or did they get sick or get sent home or dealing with sick relatives or their own issues in getting what they need to get to work or have a life.
They are all getting rich at home speculating on spa chemicals futures online.
1) Fred : Advance Retail & Food Services Sales reached a new all time high @$212.5B in Oct 2020.
2) Online Retail Sales are : 0.143 x212.5 = $30B. Online sales are falling from Q2 to Q3 2020. Why ?
3) Since late June 2020 WTI is flat at around $40.
4) WTI took a plunge between Mar to May 2020 averaging perhaps around $20.
5) There is no inflation, but Colgate toothpaste is half size for the same price.
6) When the viruses pincer attack will be at peak Macy’s Herald Sq might shut it’s doors good.
7) Amazon Q1, Q2, Q3 2020 sales are : $75.5B, $89B & $96.2B. Something is wrong
Plug this in for FRED and look at 20 year range:
E-Commerce Retail Sales/Consumer Price Index for All Urban Consumers: All Items in U.S. City Average/Employment Level*228.723*1000
How many more would be dead from this contagion without the isolation and distancing that e-commerce enables?
More of an open question than is commonly admitted.
CDC is showing all cause deaths perhaps 7% or 8% above baseline…but US military reports 69,000 cases…and *10* deaths.
Age composition plays a role…but that is a *huge* disparity in fatality rates.
Sensible retrospective analysis is going to reveal a lot more accurate info than CNN’s daily death clock.
lenert and Cas127,
Here are case studies where isolation and social distancing was difficult to implement:
St. Quentin reports 2,888 confirmed cases (out of about 3,020 inmates) and 28 deaths = 1.0% of those who got Covid died.
The CA Institution for Men reported 2,152 confirmed cases and 27 deaths = 1.3% of those who got Covid died.
These are California state prisons, therefore controlled environments where cases and deaths are known, and social distancing and isolation is difficult. The inmates have lousy healthcare like many lower-class Americans. They don’t get helicoptered to Walter Reed when they get sick. Only when they get really sick, the prison calls 911 and sends them to a local hospital.
In other words, if there is herd immunity at all, it required that nearly everyone got Covid, and that over 1% of the population dies in the process.
Mortality rate of US as a whole is now a bit above 2%. In the Northeast some states are above 5%. It would appear that penal institution guests fare better than those outside. And that’s with a much higher level of contagion in the confined-guest population.
Seems you (willfully?) misread my comment. These deaths at the prisons were Covid deaths and did not include deaths from execution, murder, accidents, suicides, and deaths from other causes and diseases. These Covid deaths were ON TOP OF all the other deaths.
Wolf, another mea culpa on my part. I should have written “covid-19 mortality rate”, not simply mortality rate. Pulled the numbers from John Hopkins 20 Nov data. My point was prisons and jails are doing a pretty effective job all things considered.
Thanks for clarifying. I misread your comment :-]
The conditions for e-commerce required a growth of the high dependence on a computer world first. If it turns out that this very situation is what ultimately sets up the conditions that bring the world into proximity with disaster, then e-commerce has effectively saved no one as there is a death toll which is rising. And how do we know that all these shipments won’t themselves create conditions that give rise to another disease culture that is not now foreseen….sort of like monoculture and the potato blight. Mutts often do better than pure breds.
FYI, that FRED chart using percent change from year ago (at Q2 peak) is 535% higher!
Nonsense. That’s result of your homemade concoction and random mish-mash of data.
Sadly, the Wolf filters will block a link, but check out:
left axis: (a) E-Commerce Retail Sales, Millions of Dollars, Seasonally Adjusted (ECOMSA)
Right axis: Real Disposable Personal Income: Per Capita, Chained 2012 Dollars, Seasonally Adjusted Annual Rate (A229RX0)
It’s easy to see the tsunami Real Disposable Personal Income explosion crashing into the E-Commerce Retail Sales shores, but apparently the wave is receding somewhat. It’s highly likely, that as inflation hits e-com harder, fewer people will play that game of online spending (without limits).
The wealthy will continue buying at any price, but the increasing amount of people in poverty will be having far less online shopping fun. A 535% gain is seriously not sustainable and the nonlinear explosion is over.
A pretty good rationality check for all micro/macro economic analysis is to compare individual vs aggregate growth rates for various metrics.
The former cannot dramatically outpace the latter for very long unless 1) starting from a very low base or 2) serious weirdness/book cooking is going on.
That is one reason why astronomical Amazon PEs don’t make much sense…they imply a rate of future growth that a company already selling $250B in retail goods is unlikely to achieve when the retail mkt is growing, what, maybe 5%.
Ditto Google/FB and the aggregate ad industry
“A 535% gain is seriously not sustainable and the nonlinear explosion is over.”
Nonsense. There is no 535% gain. That’s a spurious result of your random homemade mishmash data concoctions.
As long as you buy stuff online with your free stimulus, I’ve heard it doesn’t cost the taxpayers a penny!
Free Money Quote of the Day:
“I hope that Congress will seriously consider reallocating $580 billion of funds that have already been appropriated that wouldn’t cost taxpayers an additional penny,” Mnuchin said in a phone interview on Thursday.
Well he is right in one sense, we are paying for more and more stuff with currency debasement instead of taxes. It is quite a clever game they are playing.
You can kind of see we are really getting nearer the end of current fiat system as the system incentives more and more wasteful spending of other people’s money thinking that will improve our well being.
“It is quite a clever game they are playing.”
But a very old one, just using modern tools.
Inflationary financing of governments has been going on for as long as there have been governments.
Fun (sick) fact – The US quarter has ridged edges because historically (going back to at least the Romans) governments used inflation to cheat the populace by gradually “shaving” the coinage…debasing the precious metal content.
Ridged coins would reveal such government perfidy.
The “honest” US government “fixed” that safeguard of integrity by removing the previous metal content of quarters entirely in 1965 (as Bretton Woods was falling apart, due to massive intl trade imbalances making honest backing of currencies “impossible”).
But they kept the ridges on the quarter.
Hallmark of an integrity sidestepped.
Not only the state used to shave.
Without years of overengineering and outright paranoia, the whole ecommerce system could have easily buckled under such a spike. But it didn’t… the internet, and the people running it behind the scenes, more or less kept working without a hitch.
I feel like this has been taken for granted, as otherwise world economy would be in a *very* different place right now.
Yes, the ecommerce system has held up amazing well, though there were some bottlenecks and hiccups and supply chain issues. And quite a few workers got Covid.
They have to deal with the Christmas season. So they should have handled it. Peak was below expected 2020 Christmas peak and they used the covid excuse