High Gas Prices Won’t Slow US Consumers Down
Original release date: April 14, 2022
In line with steadying consumer confidence and growing inflation concerns, March saw a growth, albeit slow, of 7.0% percent over year-over-year for All Stores, with All Stores Less Automotive growing 6.4% and All Stores Less Automotive, Food, Pharmacies growing by 6.6%.
Gasoline Stations continue to be the largest category this month at a staggering 37.9% year-over-year. With inflation top of mind, it is unsurprising that even as consumers look to hybrid work environments and favour shorter commutes, the category continues to experience impressive performance. Grocery Stores are also up in March (9.0% growth year-over-year) as inflation hits the category almost as hard. Even though consumers are starting to venture out to restaurants and out of home experiences more and more, there is still no end in sight for the growth in the category.
Another category that is showing strong growth into March is Food Services and Drinking Places, which grew by 20.2% over the previous year, showing that consumers are returning to restaurants. This coupled with a continued growth of 7.5% in Clothing and Accessories Stores shows that consumers are finally able to start going out again, including special occasions that may have previously been rescheduled. This increase could correlate to the minor growth being seen in Nonstore Retailers, that is beginning to normalize as the category grew only slightly by 2.6%. Consumers are not only looking to purchase products and experiences related to going out but are also looking back to brick and mortar to find them.
The categories that continue to struggle are unsurprisingly Electronics and Appliance Stores and Motor Vehicles and Parts Dealers, which fell by -9.6% and -1.0%, respectively, over March 2021. With the continuing invasion of Ukraine straining the world’s neon supply (necessary for producing microchips), the categories are likely to continue seeing an uphill battle as demand continues to outpace supply. Overall, March showed some growth, but did not see the full return to normal that people have been hoping for. The outlook is still relatively positive for US retail, but could further inflation limit more substantial growth?