US Retail Performs Better Than Expected in September
Original release date: October 14, 2022
The US retail market continued to grow in September by 8.6% for All Stores YOY, with All stores Less Automotive, Food, Pharmacies up 8.7% YOY.
A major event that occurred all along the east coast of the US in September was Hurricane Ian. Originally making landfall in Florida on September 28, there were numerous categories that grew more than expected in September, mainly:
- Food and Beverage Stores, up 6.7% YOY, and
- Building Material and Garden Equipment Stores, up 9.2% YOY.
These levels of growth (especially Building Materials) were a bit surprising with inflation data showing an increase of 8.2% in September .
Along with this inflation, other categories that are significant in the consumer’s discretionary spend are starting to slow down; Clothing and Accessories Stores, up only 4.5% YOY and Department Stores, up 1.9%. Department Stores that report in the US are typically very clothing focused (think Macy’s, Nordstrom’s, etc.), so these categories often go hand in hand. With customers starting to feel the pressures of inflation, we expect these categories to not see the impressive sales they were experiencing over the past year.
Many other categories were seeing increasing sales coming out of the pandemic, but now seeing a lot of these highs begin to cool off in a similar pattern. For one, we are seeing Food Services and Drinking places up 13.0% YOY, which may sound high, but they are up 17.9% YOY, so they are not performing to where they were. It seems that the rush to restaurants may have been short lived, unless you have a truly unique experience that is. We are also seeing this slowing in categories like Furniture and Home Furnishing Stores and Electronics and Appliance Stores (1.5% and -8.9% YOY respectively), which we believe to reflect the cooling of the housing market.
Though U.S. retail sales seems to be continued unprecedented growth with YOY still on track to see a growth of over 10.0% growth over 2021, it seems that sales are starting to normalize.
As categories start to return to more normal growth patterns, here are some questions we are considering this month:
- Will great shopping experience be enough to retain more and more budget-conscious customers?
- Who are customers finding too expensive with inflation?
- What categories will drop further going into holidays?
- When will other categories normalize to pre-pandemic sales trends?
- How will YOUR customer experience retain the consumer?
Reach out to JCWG for support with your customer experience to make sure you stay relevant as spending shifts. Join us next month to see how spending changes in October.