Dropping Prices of Goods Hit Retail Sales (Inflation Shifted to Services, Which Retailers Don’t Sell). Charts by Retail Category

But ecommerce sales continue to soar, despite price drops.

By Wolf Richter for WOLF STREET.

Prices of many goods that people buy at retailers have dropped in recent months, including gasoline (price plunged 20% from a year ago!), food, new vehicles, consumer electronics, sporting goods, furniture, appliances, cannabis products (price plunge may have bottomed out), etc., as inflation shifted massively to services last year and has stayed there.

Dropping prices, given the same unit sales, would translate into a drop in dollar sales. Today’s retail sales report reflects those price drops.

Yet, despite price drops, retail sales rose 0.3% in May from April and 1.6% from a year ago seasonally adjusted. Not seasonally adjusted, retail sales jumped 6.6% in May from April and 2.8% year-over-year.

Ecommerce continues to surge from record to record, despite price drops of many items sold online. Sales at some retailer categories have dropped, as retailers continue to lose ground to ecommerce, and as prices dropped, and other factors. Gasoline sales plunged exactly in line with the plunge in gasoline prices (see chart below that overlays gasoline retail sales and the CPI for gasoline).

Retail sales are a measure of how retailers are doing. They measure sales of goods by retailers. And retailers are struggling with price drops of goods, after the huge price spikes in 2020 to mid-2022. And they’re struggling with the relentless shift to ecommerce.

Retail sales aren’t a measure of consumer spending – we have a measure for that, which include services, not just goods. And consumer spending, adjusted for inflation, has been growing at a surprisingly strong pace.

The charts below show the three-month moving average to tamp down on the drama of the monthly ups and downs that obscure the trends.

What we see is total retail sales have remained roughly flat for the past four months, despite widespread and often big price drops in the biggest categories. This followed the explosive surge in 2020 through mid-2022, powered in part by pandemic stimulus and in part by rampant price increases.

This is a weird looking chart for the history books on how to distort an economy:

Retail sales by category, 3-month moving average, seasonally adjusted.

New and Used Vehicle and Parts Dealers (19% of total retail sales):

  • Sales: $131 billion
  • From prior month: +0.2%
  • Year-over-year: +1.5%
  • CPI used vehicles: +4.4% for the month, -4.2% year-over-year
  • CPI new vehicles: -0.1% for the month, +4.7% year-over-year.

Ecommerce and other “nonstore retailers” (16% of total retail sales), ecommerce retailers, ecommerce operations of brick-and-mortar retailers, and stalls and markets:

  • Sales: $112 billion
  • From prior month: +0.4%
  • Year-over-year: +7.0%

Food services and drinking places (13% of total retail), includes restaurants, cafeterias, bars, etc.

  • Sales: $88 billion
  • From prior month: +0.3%
  • Year-over-year: +9.7%
  • CPI for “food away from home”: +0.5% for the month, +8.3% year over year:

Food and Beverage Stores (12% of total retail):

  • Sales: $82 billion
  • From prior month: unchanged%
  • Year-over-year: +3.8%
  • CPI for “food at home”: +0.1% month-to-month, after two months of drops, +5.8% year over year:

General merchandise stores, without department stores (9% of total retail):

  • Sales: $61 billion
  • From prior month: -0.2%
  • Year-over-year: +3.4%

Gas stations (8% of total retail):

  • Sales: $54 billion
  • From prior month: -1.5%
  • Year-over-year: -16.1%
  • CPI for gasoline: -5.6% for the month, -19.7% year over year:

This chart shows the relationship between the CPI for gasoline (green, right axis) and sales in billions of dollars at gas stations, including other merchandise gas stations sell (red, left axis):

Building materials, garden supply and equipment stores (6% of total retail). Home Depot is in that category:

  • Sales: $42 billion
  • From prior month: -0.3%
  • Year-over-year: -3.2%

Clothing and accessory stores (4% of total retail):

  • Sales: $26 billion
  • From prior month: -0.4%
  • Year-over-year: -1.4%
  • CPI apparel: +0.3% for the month, +3.5% year-over-year.

Miscellaneous store retailers, includes cannabis stores (2.3% of total retail): Specialty stores, from art-supply stores to wine-making supply stores. Cannabis stores are the growth driver.

  • Sales: $15 billion, seasonally adjusted
  • Month over month: +0.3%.
  • Year-over-year: +3.7%

There is no CPI for cannabis. Cannabis Benchmarks U.S. Spot Index reported that the average price in the US rose from the March low, but is still down 5.5% year-over-year. You can see the sharp price drop in 2022 to March 2023 in the chart:

Furniture and home furnishing stores (1.7% of total retail):

  • Sales: $11 billion, seasonally adjusted
  • From prior month: -1.5%
  • Year-over-year: -6.6%
  • CPI Household furnishings: -0.4% for the month, +4.1% year-over-year.

Department stores (now down to 1.3% of total retail, from around 10% in the 1990s) are toast. Most of them have vanished. Consumers are buying the exact same stuff online, including at the ecommerce sites of the few surviving department store chains:

  • Sales: $11 billion
  • From prior month: -1.6%
  • Year-over-year: +2.8%
  • From peak in 2001: -40% despite 21 years of inflation.

Sporting goods, hobby, book and music stores (1.3% of total retail);

  • Sales: $8.6 billion
  • Month over month: +0.1%
  • Year-over-year: +1.1%.

Electronics and appliance stores: Specialty electronics and appliance retailers (Best Buy, Apple stores, etc.). Electronics is a huge business, but nearly all of these sales have wandered off to other retailer categories (general merchandise, such as Walmart) and to ecommerce.

  • Sales: $7.6 billion, seasonally adjusted
  • Month over month: -0.5%
  • Year over year: -6.4%
  • CPI consumer electronics: -0.3% for the month, -7.6% year over year.
  • CPI appliances: -0.3% for the month, -0.2% year over year.

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.

  56 comments for “Dropping Prices of Goods Hit Retail Sales (Inflation Shifted to Services, Which Retailers Don’t Sell). Charts by Retail Category

  1. Green Bay says:

    Wolf, surely you aren’t predicting things out to the year 2202?? :-) See typo, “…huge price spikes in 2020 to mid-2202”

    • Wolf Richter says:

      I’m kind of a long-term guy, LOL


    • SGT SNUFFY says:

      Hey Green Bay, is Wolf for real or is he on some type of drug and living in a fantasy world. ‘We The People’ want to know. Or maybe there’s something in the water where he lives.

    • Leo says:

      While sales are staying high, the reality is that customers are getting less for the same dollars. Shrinkflation is most evident in Restaurants and Cafes (services). A standard meal doesn’t fill you up any more despite increasing 50% in price.

      Here, in Seattle, burger patties are shrinking and fries served on the sides are increasing. For people like me that don’t like fries to make up for calories, it means ordering anothe Entrée!

      So service sales are going higher with restaurant bills despite me getting same or lesser protein.

      • joedidee says:

        starting to limit OUT TO EAT stuff
        $60 for 2 for lunch
        just paid $4.97 for T-bones – big 1 1/2 lb’rs
        seasoned and burnt on grill to perfection
        and NO TIPPING

  2. jo6pac says:

    Well I’m shopping e do to my little truck not running and favorite garage people are on vacation. My wine and rum was delivered then next day I order food on amazon and their employee went to local save mart and picked out what wanted and delivered. Amazing but I do hope to get my truck fixed next week. I live 10 miles from town in ag world so no buses.

    • Leo says:

      Meanwhile, wallstreet celebrating as half the country gets screwed with affordability crisis for necessities.

      J Pow, look what you did.

      • Kevin says:

        Slow QT is designed for the benefit of Wall Street. And all of their moves in the past year have been telegraphed in advance to the market. There was never any surprise or emergency rate hike or announcement of active selling of MBS. It shows who J Pow works for.

        • Leo says:

          Yeah, but I am surprised at the obscenity of these rallies at a time when there is no other good news from core economy and the majority is demotivated and pessimistic.

        • joedidee says:

          understand about truck repairs
          just did BACK brakes on truck – $1600+

          now waiting(3 weeks) to get brakes done on 5th wheel

          then it’s vacay time
          seems prices on stuff you LIKE/want/NEED only go up up up
          rest we don’t care about
          my laptop is doing fine at 7 years old
          streams nice using hotspot

      • Lili Von Schtupp says:

        $60 for 3 reserved tix to Indiana Jones 5, not including popcorn or soda which, sorry kids, ain’t happening. Bring our coats with the biggest pockets.

        I do count this as a necessity, albeit a rare treat. Only Indy, and, well, Mads Mikkelsen, can get me out to the theater at these insane prices.

  3. Micheal Engel says:

    MSFT, a new all time high. AAPL on the way to $3T+. QQQ might close
    Jan 14/18 2022 gap, above 381. After closing Jan 4/5 gap QQQ might pop to a new all time high.
    The upper quintiles party day and night, but layoffs announcement (not actual) in the last 5 months reached 420K, mostly in high tech.
    If the Pareto top party cont in Q3 JP will hit them with 6%.

    • Leo says:

      Sad but true! Wallstreet partying as more people have their American dreams broken.

      God bless America.

      • phleep says:

        I gently suggest, allocate some to buy (shares of) the job-eating robot, instead of that extra kid, or trip to Nowhereland. It’s just adaptation. At least we weren’t born into Hitler or Stalin-land and times.

  4. cas127 says:


    At the risk of getting yelled at for excessive speed reading (and therefore missing something in the post), do you do equivalent posts breaking down monthly sectorial *services* spending?

    I don’t recall seeing one (although perhaps it comes in a different format, so that I don’t make the connection).

    I only ask because,

    1) Services account for the bulk of GDP,

    2) Services are where the inflation is now, and

    3) “Services” include sectors that people don’t automatically think of as services per se (housing, health care, education, G spending, etc).

    I’m guessing that the G doesn’t break out services inflation in the same way as goods inflation is broken out in these charts…that’s why we don’t see very similar monthly “services inflation index” charts on site.

    Maybe I’m having transient amnesia, but I don’t *think* we see the broken out services inflation charts as frequently (or at all).

    • Wolf Richter says:

      I used to cover services sales a few times but gave up due to lack of interest. The data on services sales are quarterly. And they lag a lot. On June 9, we got Q1 services sales. By that time, we already had Q1 GDP and Q1 consumer spending and Q1 everything else. So people kind of moved on.

      This data covers all services, not just services sold to consumers.

      But if there is interest, I might restart it again to see what happens.

      • joedidee says:

        contractors are super busy
        and charging like it

        son put on one of those new AC(16 seer)
        got 2 bids on 5 ton
        $14,000 and $22,000

        I made phone call and he got his at $5600(I have non-contractor who only does new installs)


        • Mitry says:

          A 5 ton AC is not a small unit. That’s kind of like pulling into the dealership in an expensive car and expecting a deal on service after the warranty is up. I don’t know how difficult the install was, but $22k is a little high, $14k is the new normal. You got your son an incredible deal.

          I think part of the issue is too much work and not enough workers, so the price of labor is up. The price of parts is up. The price of insurance is up. Those 3 factors alone are enough to double the price of anything from 3 years ago. All that gets passed along to the customer. Plus profit. Like the Red Queen, we’ve got to keep running to just to stand still.

  5. Micheal Engel says:

    1) The front end, the 1M/2Y rate of change is important. The 2Y/10Y and the 3M/10Y are defective.
    2) Two months ago the 1M was 3.82, today 5.08, +1.26, a big change.
    Two months ago the 3M was 5.11, today 5.22, n/c
    Two months ago the 2Y was 4.21, today 4.64, +0.43
    Two months ago the 10Y was 3.56, today 3.72, +0.16, n/c
    3) The 1M is sharply up, the 2Y is down dragging the 10Y with it.
    4) Two months ago 2Y – 3M was : 4.21 – 5.11 = (-)0.90. Today :
    4.65 – 5.21 = (-)0.56. Investors park in the 2Y.
    5) Two months ago 2Y – 1M = 4.21 – 3.82 = 0.39, today : 4.65 – 5.08 = (-)0.43 investors park their money in the 2Y. In the last two months the front end change 1M/2Y is : from +0.39 to (-)0.43 ==> 0.82.
    6) The Fed will stay put. It will not cut rates. In recession the 2Y will slump
    dragging the 10Y down with it, for a while, but the 10Y might rise above the 2Y, thereafter above the 1M ==> the yield curve might recover, at least for a while.

  6. Occam says:

    Remember when Bernanke talked about dropping money from helicopters? The charts in the article show the effects on the real economy of doing that. Remember when Bernanke said that the Fed had the tools to stop inflation in 15 minutes? We’re all still waiting for that demonstration. Fed policy is asymmetrical in favor of easy money.

    • Ryan Merritt says:


      And when push comes to shove and the people are in the streets with torches and pitchforks the same asymmetry applies.

      The cash will be printed.

    • Ben says:

      15 minutes LOL they wish. if they knew what they’re doing we wouldn’t be in this mess.

  7. Micheal Engel says:

    Michael G,
    The #2 smelly explosion of reeducation lecturers infested colleges since 2008.

  8. Craig says:

    Food prices are up 100%.
    Home prices are up 100%
    I plan to change my gender, declare my new species as tranny termite and eat my house
    Bon appetit

    • Betty says:


    • Harrold says:

      Eggs at my local store are less than before the bird flu scare. Can termites eat that?

      • Herpderp says:

        Oh thank god eggs are cheap again because I didnt know where I was gonna find the extra $600 a month to cover this years rent increase. I can ween it from the 300 dozen eggs I buy!

        • phleep says:

          “Long ago” (in compressed contemporary times) I sacrificed over a long time and pre-positioned myself with harsh self-austerity to be OK now. It has worked, quite well, so far. Key word “sacrificed” and “harsh.” Now I don’t have to claim a right to complain and externalize blame. I accept the shrinkflation helps me regulate my body weight and improve my health. I am not anchored to a glutted and profligate “American dream,” so I am not its unknowing slave. the Joneses can anchor themselves to their own vapid, addictive obsessions, thank you.

        • Herpderp says:

          Sacrifice and Harsh mean nothing when Ted Kaczynski shack sells for 480 thousand dollars.

  9. John Apostolatos says:

    The game of chicken between Powell and stocks is just stunning. It seems the pause was a big mistake, just like when Volker paused and then inflation surged again.

    As the market marches toward ATH, I wonder if inflation will rise substantially again.

  10. Brant Lee says:

    I have harped on the huge mark-ups by our giant retailers on merchandise from China for years. No one seemed to get it. Now the axe falls. Walmart, Amazon, Target, eBay, Home Depot, etc are toast. And good riddance. They want global, they have global moving in.

    Websites and apps like Temu.com are moving in with products sold directly from global factories including free shipping. Just go see the discounts. It’s because many products can be made at low cost but, with retailers controlling the American market, Americans never received the low-price benefits of overseas manufacturing.

    I give Amazon and Walmart about one year, then the party is over.

    • Whitten says:

      Temu advertised to me while I’m reading wolfstreet (and I’m zero percent kidding here – I sent a screenshot to my husband) : mens padded underwear (biological woman with she/her pronouns if you know what I mean), a rat trap, ugly women’s leggings, a portable bathtub (I have one in my bathroom), an octopus costume for a baby (it’s not Halloween but I have a couple kids), a ton of guns (no guns in my house), some sort of American coin (got those – not sure why they wanted me to buy a nickel), and a Kim Kardashian looking onesie (I don’t wear cheap spandex). All in one block ad… a series of random items I could buy from their site. Clearly they haven’t figured out how to target their customer.

      Amazon listens to my thoughts. Amazon is not toast in 1 year.

      BUT I do agree that markups are insane.

      • Madeline says:

        “Amazon listens to my thoughts.” That is creepy as hell. We are so, so far gone.

        • vecchio gatto veloce says:

          One thing about Amazon, is that it lets consumers get a good look at a diverse set of products for a specific application. As I recently commented, I needed a oil filter cap tool for my BMW to do my first oil change on it. The tool I wanted, from all I saw for sale, was from a company that was shown on the photo of the tool. But instead of buying it through Amazon, I went to the manufacturing company’s website, and bought it directly from them.

          Doing things this way also helps a consumer learn about where products are manufactured. So much of the stuff listed on Amazon is not made in the USA, but Amazon does not seem to want to let customers know much about the country of origin.

          The tool company’s website informed me that they were manufactured in-house in the States. So, thanks to Amazon, I bought a very well machined, niche-use tool that was made in the USA.

      • phleep says:

        The master I know versus the new master I don’t. To buy for cheap might have hidden costs of another kind.

      • vecchio gatto veloce says:


        You are right about Temu. What the hell is that stuff?

        And no, I don’t wear cheap spandex either, but I do have a nice collection, and I wear it almost every day. The new fashion trend is aerodynamic mid-calf length socks. Gotta get some of those, eh.

        Rest In Peace Gino Mader. He rode 26 laps around the sun as fast as he could, and the man was very fast. He will be missed in the peloton.

    • Flea says:

      Wal mart vacuum cleaners higher than Home Depot and Menards

    • JD says:

      Temu is losing $15 to $20 on EVERY order to US consumers who are generally spending under $30 per order. This is far from sustainable.

    • Flashman says:

      I can’t escape Temu advertising on my devices. The more I try to get google to stop it the worse it gets.

      I am sure Fingerhut was much better.

      • tolkapiam says:

        Global Free shipping of light weight producys by Speedpost (china ) is (underhand subsidy) by china Govt to allexporters. Even less than $10 valie order. No guarantee you will get it. but refund after compliant of non delivery mostly. Iam in Ecom.

    • Flea says:

      Better read remu reviews as usual chinese company,selling junk. Want to start a really successful company in America make appliances that work and last more than a couple of years

  11. Paul says:

    What caught my eye in almost all those charts that in order to revert to the mean they would still have to drop a good bit.
    Probably doesn’t mean anything.

  12. Gary Fredrickson says:

    If housing services is an issue, it would seem that more stringent credit rating to deny commercial mortgage refinance might be an achievable target. Hopefully, the banks facing their own issues will look at self preservation and stop loaning money to any company needing it. The old fashioned loan concept was to only loan to those who didn’t need the money.
    The key is to end “the liquidity.:

  13. CommonCents says:

    Every chart needs to go back an extra 2 years, as it might shed a bit more light….it’s spooky how much 2021-2023 charts are mimicking 2006-2008 right now. In these charts only going back to 2008, look how 2023 most resembles 2008 than any other year. Coincidence? Or do we give history a chance?

  14. longstreet says:

    Show the Fed a chart of the price Taylor Swift tickets

  15. Redneck_Millionaire says:

    Boys and Girls, Please be patient. You want higher rates? They are coming.
    Will Powell pull a Greenspan ? Maybe. What other idiocy will Government or FED pull? Have to wait and watch and listen. I hear that awful Disco music…….

    Wonder who will get the Nobel for this mess?

  16. Bobber says:

    Lots of winners and losers being created by government today. Inflation is just a wealth transfer from one party to another. If you aren’t raising your income, you are losing big.

    Many folks lost 20% of their wealth potential the past three years, and they don’t even realize it. This includes the young family looking for a home on the coasts.

    Blame a rogue Rederal Reserve that has stepped into the role of perpetual economic stimultor, when it should be on the sidelines restricting the money supply in accordance with the economies long term growth potential.

    • Einhal says:

      Correct. If the economy is not actually growing, “stimulation” is just reallocating the pieces of the pie. The only way to have real growth is to have a bigger pie.

      • sunny129 says:


        For that our current Debt based consumption Economy has to transform it self productive circular/sustainable kind.

        Manufactures producing living wage jobs. Possible by only those who are controlling the capital and the incentives from the Govt.

    • Redneck_Millionaire says:

      The debt clock is speeding its way to 32 trillion. Thank goodness they raised the debt ceiling in time…. HEE HEE. Hopes of limited Government has been over for decades………..

Comments are closed.