Amid still difficult circumstances, US retail sales saw an extraordinary year-over-year jump in June, fueled by double-digit growth in several sectors.

Coresight Research’s measure of core retail sales is the unadjusted year-over-year change, excluding gasoline and automobiles. This metric stood at 9.2% in June versus May’s 1.2% rate and surpassing February’s (pre-pandemic) 7.5% growth. Strongest growth was seen by nonstore retailers, home-improvement retailers, and sports and leisure goods retailers, as we discuss later, suggesting pent-up demand in nonfood categories.

In the US, temporary store closures began in the week of March 8–14 and peaked in the week of March 15–21. Stores began to reopen in May following the easing of Covid-19 lockdowns by states and local governments. The reopening of US retail stores peaked in early June.

[caption id="attachment_113024" align="aligncenter" width="700"] Data are not seasonally adjusted Source: US Census Bureau/Coresight Research [/caption]  

Retail Sales Surge Month over Month

The Census Bureau’s core metric is seasonally adjusted retail sales including automobiles and gasoline. Year-over-year sales growth by this measure turned positive in June at 5.0% versus May’s 1.1% decline.

On a month-over-month basis and seasonally adjusted, retail sales surged 6.4% in June.

[caption id="attachment_113025" align="aligncenter" width="700"] Data are seasonally adjusted
Source: US Census Bureau [/caption]  

Retail Sales Growth by Sector

A number of sectors saw very strong growth:

• Home-improvement stores (building-material and garden-supply retailers) saw a 22.6% increase, with major retailers such as RH having previously pointed to strong growth into June. This impressive growth supports our expectation that home-improvement retailers will be the fastest-growing store-based nonfood sector this year.
• Even amid more stores being open, nonstore retailers continued to gain momentum, including for essentials: The sector, which includes e-commerce firms, saw sales growth accelerate to 30.2% in June from 23.1% in May.
• Sports and leisure goods retailers saw an extraordinary 22.4% jump in sales. This sector is a mix of diverse nonfood subsectors and reflects a jump in demand for selected discretionary categories, even as clothing and department stores saw sales down year over year (see below).
• Sales at grocery stores grew 10.5% in June versus 14.1% in May. In June, grocery-store sales growth remained slightly below the overall food sector’s 11.4% growth.

Some sectors remained negative in June, but they saw a substantial sequential easing of sales declines. These included furniture and home-furnishing stores, clothing stores, department stores, and electronics and appliance stores.

• Clothing-store sales declined by 24.3% in June after plunging 62.3% in May, representing a 61.0% increase sequentially (a percentage on a percentage, not a percentage-point increase). This compares to sequential improvements of 93.3% for furniture retailers and 53.6% for department stores, on the same basis. A number of major clothing retailers reported higher-than-anticipated sales productivity levels. For 2020, we expect the clothing-store sector to underpace growth in consumer spending on apparel.
• Sales at department stores (a subset of general-merchandise stores and weighted toward apparel) declined by 12.1% in June versus May’s 26.1% fall.
• Health and personal care stores saw sales decline 2.5% in June after May’s 11.5% slide. This figure masks a polarization between essential retailers such as pharmacies and discretionary retailers such as beauty stores—which had shuttered stores from March but recovered substantially in June due to lockdowns easing and stores reopening.
• Sales declines at furniture and home-furnishing stores and electronics stores eased substantially.

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Figure 3. US Total Retail Sales, by Sector: YoY % Change [wpdatatable id=323 table_view=regular] Data are not seasonally adjusted Source: US Census Bureau/Coresight Research