Retail sales are going well, thank you buyers. But gas station sales are falling due to the collapse in gasoline prices
Retail sales excluding gas stations rose 0.8% in August from July. Inflation shifted away from goods (retail) to services.
By Wolf Richter for WOLF STREET.
There was a large drop in sales at gas stations, driven by a collapse in gas prices and a drop in demand for gas (both of which I discussed yesterday).
But retail sales excluding forecourt sales rose 0.8% in August from July and have been on a solid upward trend for months, even as inflation has shifted from goods sold by retailers to services not sold by retailers sold.
Retail sales track sales of goods, not services. And inflation has shifted from goods to services, and services inflation is now driving headline inflation (which I discussed a few days ago), even as some commodity prices fall.
Today’s Census Bureau retail sales data is based on surveys of approximately 5,500 retailers, broken down by retailer category, from a retailer perspective, not a consumer perspective.
Total retail sales rose 0.3% and 9.1% year-on-year to $683 billion (seasonally adjusted) from July, despite the decline at gas stations. Compared to August 2019, the last normal year, total retail sales increased by a staggering 31.1%.
Inflation in trading = price increases. But where?
Retail sales are grouped by retailer categories, such as auto dealerships and e-commerce sales, rather than product categories. But CPI inflation is measured by product category. Therefore, CPI inflation cannot simply be applied to retail sales as the categories do not match.
Headline CPI inflation rose 0.1% in August vs. July and 8.3% yoy. Services CPI is inexorably rising but plays no role in retail sales as retailers sell goods.
Gasoline CPI: -10.6% in August from July. But retail sales at gas stations include the other items they sell. Many gas stations are in fact convenience stores selling groceries, drinks and other items, and the fall in the price of gasoline has been offset by increases in the prices of the other items they sell.
CPI for “eating at home”: +0.7% in August from July – which falls in the “food and beverage outlets” retail category. But Walmart is also a giant grocery retailer and is classified as a “retail store,” not a grocery and beverage store.
Durable Goods CPI: +0.5% in August from July. Durable goods are sold by multiple categories of retailers, including new and used car dealers, e-commerce retailers, home appliance stores, electronics stores, furniture stores, convenience stores, etc. Their various products are subject to different pricing environments, with some prices going down (e.g. used vehicles). and electronics) and with other rising prices (e.g. new cars).
Sales at new and used car and parts dealers, the largest category rose 2.8% in August from July and 6.8% year-on-year to $128 billion, seasonally adjusted. Compared to August 2019, sales increased by 21%.
This is due to a mix of much higher prices and much lower volumes as new car dealers still face major inventory shortages despite having shifted and some brands now have ample inventory while other brands are essentially out of fuel. efficient vehicles.
Sales at e-commerce and other “non-store retailers” fell 0.7% from July’s record to the second-highest ever, $108 billion, seasonally adjusted, up 11% year-on-year and up 70% from August 2019.
This includes sales from pure e-commerce retailers, from e-commerce operations of stationary retailers, and from stands and markets:
Grocery and Beverage Stores: Revenue increased 0.5% mom and 7.2% year-on-year to $79.5 billion, up 23% from August 2019:
Gastronomy and drinking establishments: Revenue rose 1.1% in August from July and 10.9% year over year to a record $86 billion. This is up 32% since August 2019. These include bars, restaurants, coffee shops, cafeterias, delicatessens, fast food joints, etc.
Convenience Stores: Revenue rose 0.4% mom and 4.2% year-on-year to $58 billion, up 20% from August 2019. Walmart and Target are in this category, but department stores aren’t:
gas stations: Sales for the month fell 4.2% to $64 billion, the second straight month of declines as gasoline prices fell. Sales are still up 29% year over year and 51% compared to August 2019. Gas station sales include the other things they sell: many gas stations are effectively convenience stores selling all manner of groceries, beverages, and other items, and the fall in the price of gas is offset by increases in the price of their other items.
Building materials, garden supplies and equipment stores: Revenue rose 1.1% this month and 10.5% year over year to $43 billion on a seasonally adjusted basis, up 36% from August 2019:
Clothing and Accessories Stores: Revenue rose 0.4% mom and 3.5% year-on-year to $26 billion, up 16% from August 2019:
Various retailers (including cannabis stores): Revenue for the month was up 1.6%, up 15% year over year, and up 47% since August 2019 to $16.2 billion:
Furniture and furnishing stores: Revenue declined 1.3% month-on-month and 1.6% year-on-year to $11.8 billion. This was still 16% up from August 2019:
Department Stores: Revenue was up 0.9% for the month and just 0.7% year over year, and was basically flat from August 2019’s $11.4 billion. Compared to the top department store in 2000, sales were down 43%. Numerous department stores, from Sears on down, declared bankruptcy and mostly disappeared. Anything you can buy in a brick-and-mortar department store, you can also buy online, including on this chain’s website, and that’s where these sales went:
Sporting goods, hobby, book and music shops: Revenue was up 0.5% mom and 5.5% year over year to $9.3 billion, up 38% from August 2019:
Electronics and Appliance Stores: Revenue fell 0.1% month-to-month and 5.7% year-on-year to $7.6 billion, flat from August 2019.
Only electronics and home appliance stores specifically fall into this category, such as Best Buy’s brick-and-mortar stores or Apple’s brick-and-mortar stores. It doesn’t apply to other retailers that sell electronics and gadgets, and it doesn’t apply to e-commerce sales of electronics and gadgets. This brick-and-mortar category is also slowly out, with sales down 15% today from where they were 15 years ago:
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