Unwound less than half the big jump in October, zig-zagging higher, which is why one month doesn’t make a trend.
By Wolf Richter for WOLF STREET.
Retail sales, reported today, are based on retailers’ revenues. Retail sales cover goods, not services. Prices of services have been surging, and services is where nearly two-thirds of the consumer spending goes. But prices of many goods have been falling in recent months, such as gasoline, used vehicles, electronics, household furnishings, and others. This is where retail sales dipped in November. Retail sales rose where prices rose, such as stores that sell food and beverages and at restaurants.
Another factor were the “inflation checks” that some states sent to residents in the fall. In California, a big batch of electronic deposits went out in October; a second batch went out through mid-November. Another batch is going out right now; and a final batch will go out through mid-January. Some of the early funds got spent in October, adding to the surge in retail spending in October, with smaller amounts getting spent in November.
Total retail sales declined by 0.6% in November from October, to $689 billion (seasonally adjusted), unwinding less than half the 1.3% jump in October (from the “inflation checks?”). Year-over-year, retail sales were still up 6.5%. And compared to November 2019, they were up 32%. The insert shows how sales zig-zagged higher, which is why one month doesn’t make a trend:
The Commerce Department obtains this sales data via survey from about 5,500 retail locations, so revenue data from the company’s point of view, and not “spending” data from the consumer’s point of view.
Sales by category of retailer, largest to smallest:
New and Used Vehicle and Parts Dealers: Sales fell 2.3% for the month, to $127 billion, still up by 1.3% from a year ago, and by 20% from three years ago. This is the largest category of retailers.
The CPI for used vehicles fell by 2.4% for the month, after exploding in 2021 and earlier in 2022. The CPI for new vehicles ticked up 0.4% for the month, continuing the price gains. But the number of vehicles sold continues to be beaten down by some shortages and by massive price increases in 2021 and earlier this year that now get in the way.
Ecommerce and “nonstore retailers”: sales fell 0.9% for the month, to $109 billion, undoing the increase in the prior month. Year-over-year, sales rose 7.7%, but wait… Compared to November 2019, sales exploded by 69%!
Ecommerce sales include a large spectrum of goods, from food to used vehicles, dealing with the same price drops experienced in various product categories.
This category includes sales by the ecommerce operations of brick-and-mortar retailers, all kinds of ecommerce retailers, along with sales at stalls and markets:
Food services and drinking places: Sales rose by 0.9% for the month (against CPI of food away from home +0.5%), and by 14.1% year-over-year (CPI +8.5%), to a record $90 billion. Compared to November 2019, sales were up 37%.
During this boom at eating and drinking places, sales have leap-frogged food and beverage stores ($82 billion), which is quite something; and inflation at restaurants, though high, has been lower than at food and beverage stores.
Food and Beverage Stores: Sales rose 0.8% for the month (against CPI of food at home +0.5%) and by 8.1% year-over-year (CPI +12.0%), to a record $82 billion. Compared to October 2019, sales jumped by 27%:
Gas stations: Sales dipped 0.1% for the month, on declining gasoline prices. But at $64 billion, sales were still up 16.2% year-over-year, and by 49% from three years ago, reflecting the spike in gasoline prices through mid-2022.
Sales at gas stations include all the other stuff gas stations are selling, and many of which are convenience stores.
General merchandise stores: Sales rose 0.4% for the month, and by 4.0% year-over-year, to $59 billion, up by 21% from three years ago. This includes Walmart and Target; they’re big grocery vendors, and food inflation is rampant. Walmart, the largest grocery vender in the US, has discussed this in its earnings calls.
These sales do not include brick-and-mortar department stores whose slow death as an American shopping venue we’ll get to in a moment:
Building materials, garden supply and equipment stores: Sales fell 2.5% from the record in the prior month, to $42 billion, and were up 3.6% year-over-year. Compared to three years ago, sales were up 36%.
Clothing and accessory stores: Sales dipped 0.2% for the month, to $26 billion, and were up just 0.7% year-over-year, but were up 20% from three years ago:
Miscellaneous store retailers (includes cannabis stores): Sales rose 0.5% for the month, and by 12.1% year-over-year, to a record $16.2 billion, up 44% from three years ago:
Furniture and home furnishing stores: Sales fell 2.6% for the month (CPI for home furnishings: -0.8%) to $11.7 billion, and 3.2% year-over-year. Compared to three years ago, sales were up 15%:
Department stores: Sales fell 2.9% for the month, by 3.0% year-over-year, and by 1.6% from three years ago, to $10.9 billion.
Since 2000, sales have plunged by 45%, despite 22 years of inflation, as sales have moved from mall stores to the internet, including to the ecommerce sites of the few surviving department store chains. Ecommerce sales by department store chains are included in the ecommerce sales data above.
Back in the 1990s, department store sales accounted for about 10% of total retail sales. Today, they’re down to just 1.8%:
Sporting goods, hobby, book and music stores: Sales fell 0.6% for the month, to $9.3 billion, and were up only 1.8% year-over-year. But compared to October 2019, sales were up 42%:
Electronics and appliance stores: Sales fell 1.5% for the month, by 4.4% year-over-year, and by 5.3% from three years ago, to $7.1 billion.
The CPI for electronics fell 1.0% for the month and by 10.8% year-over-year. So these price declines are part of the challenges for these retailers; another part is that their sales have wandered off to the internet.
Only specialty electronics and appliance stores are in this category, such as Best Buy’s brick-and-mortar stores or Apple’s brick-and-mortar stores. It does not cover the electronics and appliance sales at other retailers, such as Walmart, and it does not cover ecommerce sales of electronics and appliances. In other words, the electronics and appliance business is big, but sales have left the specialty stores:
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.