November retail, food service sales up 18% from year ago

by Kim Souza ([email protected]) 223 views 

Consumers are spending more money, in part because the cost of goods are rising. The U.S. Census Bureau reported retail and food service sales rose to $639.8 billion in November, up just 0.3% from the prior month, but rising 18.2% from a year ago.

Inflationary pricing is part of the increase as gasoline stations saw sales jump 52.3% from a year ago, as consumers are traveling more and fuel prices overall are up an average of 58% year-over-year, according to the U.S. Energy Information Administration.

Food and bar establishments also saw a 37.4% increase in total sales from a year ago. Inflation is part of the gain as in November alone the cost of food in the United States increased 6.1% from the year-ago period. It is the highest food inflation since October of 2008, according to the U.S. Department of Commerce.

The National Retail Federation excludes automobile dealers, gasoline stations and restaurants to focus only on core retail. The trade group is pleased with the pace of sales growth in light of the economic headwinds that persisted in November and the near future.

“Despite economic headwinds, November retail sales data confirms that consumers continue to spend, as demonstrated by a 14% increase in sales year-over-year,” said NRF President and CEO Matthew Shay. “We expect demand will remain strong through December, even though consumers started holiday shopping earlier than ever this year. Despite the rise of the omicron variant, increased vaccination rates combined with retailers’ ongoing safety protocols and procedures have resulted in consumers who feel they can continue to shop safely and conveniently. We believe that holiday sales this year could grow as much as 11.5% over 2020.”

For the first 11 months of 2021, sales as calculated by NRF were up 14.2% over the same period in 2020. That is consistent with the full-year forecast for retail sales to grow between 10.5% and 13.5% over 2020, or a range between $4.44 trillion and $4.56 trillion, according to NRF.

“Consumers continued spending in November, building on momentum from strong early holiday shopping in October and setting the stage for a bright holiday season,” said NRF Chief Economist Jack Kleinhenz. “Consumers’ financial condition remains healthy and neither stubborn inflation nor COVID-19 appear to have derailed holiday spending despite both being top of mind.”

He said recent labor market progress has pushed demand, and most shoppers also have the income and savings to absorb higher prices driven by the pandemic and supply chain disruptions. While seasonally adjusted numbers may make the results look modest, seasonal patterns were disrupted by the pandemic and unadjusted data shows November’s sales as calculated by NRF were the highest on record, he added.

Analysts at Wells Fargo Securities expect 2021 will be a strong year with an annual GDP growth of 5%. Tim Quinlan, senior economist at Wells Fargo, expects inflation to moderate by the middle of 2022. He said lumber prices are already down from their peak last year and inflationary pressures related from the supply chain log jams are also expected to dissipate in early 2022.

“While inflation will likely stay above the Fed target (2%) in all of 2022 it should be less than we have seen this year and moderate much further by early 2023,” Quinlan said. “Consumers and corporations have the financial strength to handle this inflation for the foreseeable future,” he said.

Shay said consumers want to spend, and even though they shopped earlier than ever this year the NRF defines the holiday season as Nov. 1 through Dec. 31, so the November results mark the completion of the first half of the official season which is expected to be a record year. November sales were up in all but three categories on a monthly basis and were up across the board year-over-year, led by increases at clothing, sporting goods and furniture stores.

NOVEMBER SALES BY CATEGORY
• Clothing and clothing accessory sales rose 0.5% from October, up 35.3% year-over-year
• Sporting goods sales were up 1.3% from October, up 22.1% from a year ago
• Furniture and home furnishings sales were unchanged from October, up 18.6% year-over-year
• Electronics and appliance sales fell 4.6% from October, up 17.7%  year-over-year
• Online and other non-store sales were unchanged from October, up 15.1% from a year ago
• General merchandise sales were down 1.2% from October, up 14.2% year-over-year
• Building materials, garden supply sales were up 0.7% from October, up 12.2%  year-over-year
• Health and personal care sales were down 0.6% from October, up 9.1% year-over-year
• Grocery and beverage sales were up 1.3% from October, up 8.8% year-over-year