In the final data published by the US Census Bureau before the end of the holiday shopping season later in December, US retail sales continued to rebound strongly in November, fueled by strong 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 a solid 9.0% in November versus October’s 10.7% rate (which was slightly revised down from a first estimate of 10.8%). The strongest growth was seen by nonstore retailers, home-improvement retailers, and sports and leisure goods retailers, as we discuss later, suggesting strong demand for a number of discretionary categories—although apparel stores saw a substantial acceleration in sales declines. The strength of performance in November supports our expectations for a solid increase in total retail sales during the holiday season.

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Figure 1. US Total Retail Sales ex Gasoline and Automobiles: YoY % Change [caption id="attachment_120960" align="aligncenter" width="700"] Data are not seasonally adjusted
Source: US Census Bureau/Coresight Research[/caption]   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. In July, some states paused or rolled back reopening plans in the third and fourth weeks due to spikes in coronavirus cases. However, in August, the reopening of US retail stores improved, compared to the previous month—even as coronavirus cases continued to rise. In September, the reopening of US retail stores improved further, with many states resuming the reopenings of indoor malls as the number of coronavirus cases reduced month over month. However, in October, many states reported a spike in Covid-19 cases; as a result, the US retail traffic decline steepened, mostly toward the end of the month. Furthermore, in November, total traffic decline accelerated to 37%, as several states reinstituted more restrictive mandates owing to the surge in new coronavirus cases. Retail Sales Decrease Slightly Month over Month The US Census Bureau’s core metric is seasonally adjusted retail sales including automobiles and gasoline. Year-over-year sales growth by this measure stood at 7.1% in November versus October’s revised 8.3%. On a month-over-month basis and seasonally adjusted, retail sales decreased by 0.8% in November.

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Figure 2. US Total Retail Sales including Gasoline and Automobiles: YoY % Change [caption id="attachment_120962" align="aligncenter" width="700"] Data are seasonally adjusted
Source: US Census Bureau[/caption]   Retail Sales Growth by Sector A number of sectors saw strong sales growth:

• Home-improvement stores (building-material and garden-supply retailers) saw a 17.2% increase, following October’s 15.2% growth. This impressive growth supports our expectation that home-improvement retailers will be the fastest-growing store-based nonfood sector this year.
• Sports and leisure goods retailers saw a 14.0% increase in sales versus October’s 17.7% growth. This sector is a mix of diverse nonfood subsectors and reflects a jump in demand for selected discretionary categories such as fitness equipment—even as clothing and department stores saw sales decline year over year (see below).
• Even with more stores being open, nonstore retailers maintained strong growth momentum, including for essentials. The sector, which includes e-commerce firms, saw sales grow by 30.0% in November, following October’s 24.9% increase. This sector also includes online sales from some store-based retailers that separate this business from their store-based operations.
• Sales at grocery stores grew by 8.2% in November, remaining slightly below the overall food sector growth of 8.5%.

Several sectors posted low-single-digit sales growth:

• Health and personal care stores saw sales increase by 2.6% in November, compared to October’s 2.5% growth.
• Furniture and home-furnishing stores posted a 0.4% (almost flat) sales increase in November versus 6.5% growth in October.

Some structurally challenged sectors remained negative in November and witnessed a substantial acceleration in sales declines. These included clothing stores and department stores.

• Clothing store sales decreased by 19.2% in November versus October’s 9.2% decline. 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 19.9% in November versus October’s 10.5% fall.

Figure 3. US Total Retail Sales, by Sector: YoY % Change [wpdatatable id=640]

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Data are not seasonally adjusted Source: US Census Bureau/Coresight Research