U.S. retail sales picked up slightly for October, with grocery stores among the leading drivers.
October retail and foodservice sales totaled $694.52 billion (seasonally adjusted), up 1.3% from September but up 8.3% from October 2021, the U.S. Census Bureau reported in advance estimates on Wednesday. Retail trade sales for October — excluding motor vehicles and parts stores, gas and repair stations — rose 1.2% month over month to nearly $605 billion and grew 7.5% year over year.
Overall retail sales in September came in flat month to month but climbed 8.2% from a year earlier. Retail trade sales dipped 0.1% sequentially to $596.75 billion but advanced 7.8% year over year.
Grocery store retail sales for October edged up 1.4% month to month to $72.61 billion (seasonally adjusted), topping the 0.4% sequential gain in September and rising 8% from October 2021, exceeding the 6.8% year-over-year gain in September. The Census Bureau reported that sales at all food and beverage stores in October gained 1.4% sequentially and 7.6% over 12 months to $81.04 billion, versus upticks of 0.4% month over month and 6.4% year over year in September.
For the year to date through October, food and beverage store sales were up 7.6% year over year to $776.78 billion (unadjusted). That reflected 8.3% growth to $697.73 billion at grocery stores over the 10-month span.
“October’s 1.3% retail sales growth reflects the rebound in consumer spending after flat sales in September. Online retail, up 1.2%, continues to perform alongside home furnishings and DIY stores, up 1.1% each,” commented Claire Tassin, retail and e-commerce analyst at data intelligence firm Morning Consult. “This shift tracks with a slight downward trend in the share of consumers concerned about inflation across key categories.”
Scott Brave, head of economic analytics at Morning Consult, agreed that the recent letup in the Consumer Price Index could signal a corner being turned by shoppers when it comes to price inflation.
"The inflation relief consumers received in October that we saw in last week’s CPI report extended to this morning’s retail sales numbers. This is another welcome sign that the substantial hits to purchasing power that we saw over the summer in Morning Consult’s Consumer Purchasing Power Barometer may be fading, which bodes well for the upcoming holiday shopping season.”
Also on Wednesday, the National Retail Federation reported that October retail sales (unadjusted) rose 0.7% month to month and 6.5% year over year, compared with gains of 0.5% sequentially and 7.9% annually for September. Washington-based NRF’s estimate focuses on core retail, excluding automobile dealers, gas stations and restaurants.
The holiday retail sales outlook brightened as last week's lower inflation numbers encouraged consumers, industry observers said.
NRF noted that its numbers was up 7.7% unadjusted year over year on a three-month moving average as of October. Sales climbed 7.5% year over year for the first 10 months of 2020, keeping results on track with NRF’s forecast that 2022 retail sales will grow 6% to 8% versus a year ago. Earlier this month, NRF forecast holiday season sales (November through December) to rise 6% and 8%.
“October’s performance is a strong foothold as we go into the holiday season,” NRF Chief Economist Jack Kleinhenz observed. “Spending has gradually slowed but remains solid. Consumers continue to show resiliency despite elevated inflation, rising borrowing costs and widespread macroeconomic uncertainties. With employment and wages growing and shoppers accessing accumulated savings, we expect the trend to continue.
He added, “Early holiday deals that enticed customers appear to underly the October numbers and more promotions will be seen in November and December, which are historically the big holiday shopping months.”
October sales gained in five of nine retail categories on a monthly basis (led by grocery and beverage stores, online, building materials and garden supply stores, furniture and home furnishings stores, and health/personal care stores) and in seven of nine categories on an annual basis (with electronics/appliances stores and furniture and home furnishings stores seeing the only decreases), NRF said.
Grocery and beverage stores turned sales gains of 1.4% month to month seasonally adjusted in September and 6.8% unadjusted over 12 months. Among other retail categories in the food, drug and mass channel, sales dipped by 0.2% month over month seasonally adjusted and rose by 1.8% unadjusted year over year for general merchandise stores in October, while health and personal care stores (including drugstores) saw sales rise 0.5% month over month seasonally adjusted and 5.5% unadjusted year over year, according to NRF.
“October retail sales data confirms that consumers continue to stretch their dollars on household priorities, including gifts for family and loved ones this holiday season,” NRF President and CEO Matthew Shay stated. “With a strong labor market and excess savings, we are expecting a solid five-day holiday shopping weekend, and retailers are prepared to meet their customers with the right inventory, competitive prices and great experiences.”
