U.S. retail sales dip in November despite uptick at grocery stores

Grocery stores generated sales growth in November even as overall U.S. retail sales ticked down for the month.

November retail and foodservice sales totaled $689.44 billion (seasonally adjusted), down 0.6% from October but up 6.5% from November 2021, the U.S. Census Bureau reported in advance estimates on Thursday. Retail trade sales for November—excluding motor vehicles and parts stores, gas and repair stations—declined 0.8% month over month to $599.05 billion yet grew 5.4% year over year.

The results marked a notable downturn from October’s performance, when overall retail sales increased 1.3% month to month and climbed 8.3% from a year earlier. Retail trade sales were up 1.2% sequentially to $605 billion in October but advanced 7.5% year over year.

Grocery store retail sales for November edged up 0.8% month to month to $73.16 billion (seasonally adjusted), below the 1.4% sequential gain in October and up 8.6% from November 2021, topping the 8% year-over-year uptick in October. The Census Bureau reported that sales at all food and beverage stores in November rose 0.8% sequentially and 8.1% over 12 months to $81.63 billion, versus increases of 1.4% month over month and 7.6% year over year in October.

“Although we saw a decline across most categories in November, spending increased in some areas, including grocery stores (0.8%), health and personal care stores (0.7%), and food services and drinking places (0.9%),” Naveen Jaggi, president of retail advisory services at commercial real estate firm Jones Lang LaSalle (JLL), said in an emailed statement. “In addition, it’s important to note the year-over-year growth with gasoline stations (16.2%), miscellaneous store retailers (12.1%), retail and food services (6.5%), and food services and drinking places (14.1%).”

Source: U.S. Census Bureau

For the year to date through November, food and beverage store sales were up 7.7% year over year to $859.06 billion (unadjusted). That reflected 8.4% growth to $771.18 billion at grocery stores over the 11-month span.

"November’s retail sales report reveals a consumer spending slowdown in nearly every category outside of grocery and food services,” said Claire Tassin, retail and e-commerce analyst at data intelligence firm Morning Consult. “This shift is driven in part by dropping prices in key sectors like gas and auto, but also in the aggressive discounting by retailers as they pushed to move inventory and capture spending from price-sensitive shoppers.”

Morning Consult’s consumer spending data for November also reflect the month’s retail sales decline, according to Kayla Bruun, economic analyst at the firm. Of 19 categories tracked, only four posted year-over-year consumer spending growth in November—including grocery, up 5%—while one category was flat and 14 saw decreases for the month.

“Some of the decrease in nominal spending may be attributable to lower prices for certain goods, as overstocked inventories put pressure on retailers to discount to move products,” Bruun explained. “However, household budgetary concerns are also likely playing a role, as the continuing gap between inflation and income growth puts a strain on consumer purchasing power.”

On Thursday, the National Retail Federation (NRF) reported that November retail sales (unadjusted) fell 0.4% month to month but gained 5.6% year over year, compared with gains of 0.6% sequentially and 6.2% annually for October. NRF’s estimate focuses on core retail, excluding automobile dealers, gas stations and restaurants.

Source: Morning Consult

NRF said its numbers were up 6.5% unadjusted year over year on a three-month moving average as of November, and sales climbed 7.1% year over year for the first 11 months of 2022.

November’s sales performance, NRF noted, kept U.S. retail sales on target with its forecast of 2022 holiday sales rising 6% to 8% versus last year, and even the low end of the trade group’s holiday sales estimate of $942.6 billion to $960.4 billion would exceed the 2021 record of $889.3 billion. NRF defines the holiday retail sales season as Nov. 1 to Dec. 31, and November marks the first half.

“While job and wage gains and built-up pandemic-era savings supported holiday shoppers in November, shoppers were squeezed by inflation and higher interest rates,” NRF Chief Economist Jack Kleinhenz stated. “This was the first leg of the official holiday season and had a large hurdle to overcome with monthly comparisons because of early shopping in October, but the consumer remains surprisingly resilient. The healthy year-over-year comparison is more important and clearly shows that the economy is not in a recession. Spending is on track to meet our expectations for a solid holiday season.”

November sales declined in seven of nine retail categories on a monthly basis (with grocery and beverage stores and health/personal care stores the only gainers) but grew in seven of nine categories on an annual basis (with furniture and home furnishings stores and electronics/appliances stores the only decliners), NRF said.

Grocery and beverage stores tallied sales gains of 0.8% month to month seasonally adjusted in November and 8.8% unadjusted over 12 months, according to NRF. Among other retail categories in the food, drug and mass channel, sales dipped by 0.1% month over month seasonally adjusted and rose by 3.2% unadjusted year over year for general merchandise stores in November, while health and personal care stores (including drugstores) saw sales rise 0.7% month over month seasonally adjusted and 4.3% unadjusted year over year.