Commerce and NRF data points to retail sales growth in February

United States retail sales, for the month of February, were solid but were not at the same levels to begin 2022, according to data respectively issued today by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that February retail sales—at $658.1 billion—saw a 0.3% gain, from January to February, while posting a 17.6% annual gain. It also noted that total retail sales, from December 2021 through February 2022 saw a 16.0% increase compared to the same period a year ago.

Retail sales saw a 0.4% increase, from January to February, and were up 15.9% annually, according to Commerce. Gasoline stations were up 36.4%, from February, and food services and drinking places were up 33.0% annually.

NRF said that in its calculation of retail sales, which excludes automobile dealers, gasoline stations, and restaurants, to focus on core retail, that February fell 1% on a seasonally-adjusted basis compared to January’s revised numbers, and were up 13% on an unadjusted basis annually. And it added that in January retail sales were up 5.9% month-over-month and up 9.6% annually. NRF added its numbers were up 11.8% unadjusted year-over-year on a three-month moving average as of February.

“February retail sales reflected continued strong labor market conditions but were certainly affected by higher consumer prices,” NRF Chief Economist Jack Kleinhenz said in a statement. “With the highest levels in 40 years, there is no doubt continued increases in inflation are hitting household purchasing power and likely restraining spending. We shouldn’t be surprised by the slower pace of sales given that purchases had surged in January and the upward revisions made to those numbers. And the double-digit year-over-year increase was expected given that much of the economy was still in stay-at-home mode a year earlier. February’s sales are another sign of the economy’s resilience, but the conflict in Europe is an increasing headwind that could dampen spending around the globe.”

February sales were down in two-thirds of categories on a monthly basis but up across the board on a yearly basis, with annual gains paced by clothing and building materials stores and online sales, including:

-Clothing and clothing accessory stores were up 1.1 percent month-over-month seasonally adjusted and up 31 percent unadjusted year-over-year;
-Building materials and garden supply stores were up 0.9 percent month-over-month seasonally adjusted and up 14.9 percent unadjusted year-over-year;
-Online and other non-store sales were down 3.7 percent month-over-month seasonally adjusted but up 13.9 percent unadjusted year-over-year;
-General merchandise stores were down 0.2 percent month-over-month seasonally adjusted but up 12.6 percent unadjusted year-over-year;
-Sporting goods stores were up 1.7 percent month-over-month seasonally adjusted and up 11.6 percent unadjusted year-over-year;
-Health and personal care stores were down 1.8 percent month-over-month seasonally adjusted but up 8.7 percent unadjusted year-over-year;
-Grocery and beverage stores were down 0.5 percent month-over-month seasonally adjusted but up 8 percent unadjusted year-over-year;
-Furniture and home furnishings stores were down 1 percent month-over-month seasonally adjusted but up 7.4 percent unadjusted year-over-year; and
-Electronics and appliance stores were down 0.6 percent month-over-month seasonally adjusted but up 2.6 percent unadjusted year-over-year

Earlier this week, NRF said in its 2022 retail sales forecast that it is calling for retail sales to see an annual increase between 6%-to-8%, coming in at between $4.86 trillion-to-$4.95 trillion. NRF’s numbers come with the caveat that they do not include sales data from automobile dealers, gasoline stations and restaurants.

And it added that non-store and online sales year-over-year, which are included in the total figure, are expected to grow between 11% -to-13%, between $1.17 trillion-to-$1.19 trillion, a tally which continues to rise and has seen major traction even well before the pandemic over the last more than two years.

While this 2022 forecast falls short of the 14% annual retail sales growth rate seen in 2021, which NRF said marked the highest growth rate in more than 20 years, it noted that it tops the 10-year, pre-pandemic growth rate of 3.7%.

Naveen Jaggi, President Retail Advisory Services, JLL, wrote in a research note that as spring weather approaches and consumers trickle back to clothing stores, department stores and restaurants, sales numbers have seen measurable gains, with total retail food and drinking service sales hitting a 33.0% increase from February 2020.

“According to JLL’s Retail Q4 Outlook, suburban shopping centers have seen a faster recovery than urban retail; in fact, suburban retail traffic has returned to 2019 levels,” wrote Jaggi. “While urban mall traffic is still down from pre-COVID levels, we have seen measurable recovery over the last year as consumers begin to return to a physical office and buying new, dressier clothing. That being said, the athleisure moment is by no means over. As mentioned in the January 2022 sales report, gas stations saw a decline in sales as gas prices increased. In February, gas station sales increased 5.3 percent and grew 36.4 percent year-over-year (YOY). However, the rise of gas prices will likely have a short-term impact on consumer spending in the near term, so looking ahead we could see a slower March. If gas prices remain high, we expect consumer spending to shift from food and apparel to their gas tanks, but should gas prices lower soon, spring apparel and restaurants will quickly be back on consumers radar and drive retail sales.”

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