September Retail Sales Grew as Delta Variant Favored Spending on Goods Over Services; Matthew Shay and Jack Kleinhenz Discuss
WASHINGTON, DC - As we inch closer to the two-year mark of the pandemic, shoppers are continuing to adjust to what has been deemed “the new normal,” spurring an increase in retail spending as consumers feel more comfortable hitting the aisles rather than investing in services like dining, entertainment, or travel. Back in July, the National Retail Federation’s (NRF) Chief Economist Jack Kleinheinz shared evidence of economic recovery, which has progressed as retail sales rose in September despite supply chain challenges and inflation.
“Today’s retail sales data confirms the sheer power of the consumer to spend, and we expect this to continue,” NRF President and Chief Executive Officer Matthew Shay said. “Despite persistent challenges related to the global pandemic, supply chain, and labor shortages, retailers and their partners have shown resilience and ingenuity in getting the workforce, goods, and systems in place to serve their customers and the communities where they operate. We welcomed the chance to collaborate with the Biden administration and industry partners this week to address supply chain and labor force issues. We have seen record imports this year and are confident that collectively we can work through these challenges to ensure a healthy and happy holiday season.”
Recently, the U.S. Census Bureau said overall retail sales in September were up 0.7 percent seasonally adjusted from August and up 13.9 percent year-over-year. That compares with increases of 0.9 percent month-over-month and 15.4 percent year-over-year in August.
Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, according to Census data.
“The reopening of the economy was interrupted by COVID-19, and consumer spending, other than retail, hit a speed bump toward the end of summer,” Chief Economist Kleinhenz said. “Consumers remained active, but retail sales didn’t reflect as much of a shift away from goods to services as expected. That was a plus for retail because consumers still have a hyper-ability to spend thanks to wage and job gains and the household savings built up during the pandemic. In addition, some back-to-school spending may have spilled over from August into September because of school districts that delayed opening until after Labor Day. Overall, the September report is very promising for a strong finish for the year. Nonetheless, rising inflation and slower supply chains remain a concern. Spending might have been higher if not for shortages of items consumers are eager to purchase.”
NRF’s calculation of retail sales—which excludes automobile dealers, gasoline stations, and restaurants to focus on core retail—also showed September was up 0.7 percent seasonally adjusted from August and that September was up 11 percent unadjusted year-over-year. That compared with increases of 2.4 percent month-over-month and 12.2 percent year-over-year increase in August. NRF’s numbers were up 10.7 percent unadjusted year-over-year on a three-month moving average.
Seeking Alpha also reported an increase in grocery store sales for the month of September. Higher pricing has shown to be a major factor in the month, but the source shows grocery stores sales were up 0.7 percent month-over-month. As many were still in lock-down restrictions in September 2020, sales were 7.5 percent higher this year in the same month.
For the first nine months of the year, sales as calculated by NRF were up 14.5 percent over the same period in 2020. That is consistent with NRF’s revised forecast that 2021 retail sales should grow between 10.5 and 13.5 percent over 2020 to between $4.44 trillion and $4.56 trillion.
September sales were up in all but two categories on a monthly basis and up across the board year-over-year, led by increases at clothing, electronics, and general merchandise stores. Grocery and beverage stores were up 0.7 percent month-over-month seasonally adjusted and up 7.4 percent unadjusted year-over-year.
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As the retail market continues to shift, AndNowUKnow will be here to bring you the latest information and updates.