Online purchases up 11.6% in March, total sales up 3.6%

by Kim Souza ([email protected]) 209 views 

Spending in March on goods and food services totaled $514.1 billion, up 16% from the previous month and up 3.6% against March 2018, according to the advance monthly sales report by the U.S. Census Bureau. From January through March total sales increased 2.9% from the same period in 2018.

Online purchases in March rallied 11.6%, and outpaced all other categories, including automobile sales which rose 3.8% and comprise a lion’s share of the total volume. Excluding autos, retail sales rose about 1% in March compared to the prior month. Food and beverage stores, including grocery stores, saw total sales rise 1.8% in March, while heath and personal care speciality stores recorded a 4.4% sales growth in March compared to a year ago.

Other retailers posting sales increases include furniture and home furnishings (1.1%), building materials/lawn & garden (3.3%), clothing and accessories (1.5%), and general merchandise stores like Walmart supercenters (1.9%). Gasoline stations saw a 3.3% increase in total sales, mainly related to higher fuel prices.

Retail outlets seeing fewer sales include electronics stores( (-2.7%), sporting goods, hobby, music & book stores (-9.7%), department stores (-3.7%) and miscellaneous stores (-1.2%).

From January through March online sales have totaled $171.4 billion, up 10% from 2018. Online sales grew 10.9% in February, rebounding from the disappointing 1.2% gain recorded in January. During the same three-month period of 2018 online sales grew 11.2%, according to the Census Bureau report.

Retail analyst Jan Kniffen, CEO of J. Rogers Kniffen, said as more sales of apparel, streaming music and books and general merchandise gravitate online, brick and mortar speciality stores will continue to struggle with sales growth. He said retailers must give shoppers a reason to make the trip to the physical store when they can easily purchase millions of items on Amazon and have them shipped directly to their front door in two days. Kniiffen predicts store closures will continue to escalate through 2030. He said the new normal for consumers is to shop online for many items they once purchased in stores.

CoreSight Research reported as of early April retailers have announced nearly 6,000 store closures this year, which is more than were shuttered in all of last year. Kniffen said the store closures stalled last year because the consumer was healthy and spending more than usual in part from lower fuel prices, higher wages and lower taxes. As the tax cuts have worked their way through the system and fuel prices have started to rise consumers are expected to curb spending on special items. He predicts 2019 will be a strong year for retail, but not as strong as 2018.

Retailers like Walmart that sell general merchandise online and in stores continue to invest in pick-up solutions such as the pickup towers located in more than 700 stores. The retailer also offers pickup on hundreds of items which are fulfilled from supercenters instead of distribution centers. Last year Walmart also began testing electronic kiosks for online ordering in a few stores. The large touch-screen displays located in the electronics section of the store can access and allow shoppers to purchase any item they want,  print a receipt and pay with cash. These sales count as online for Walmart, but also get the shoppers into the stores.

Kniffen said Walmart is one of the healthier players in retail and able to withstand the Amazon disruption better than most, in part because of the technology investments it is making to bridge its stores with online orders.

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