US retail sales slipped 0.3% in December not a big surprise considering what weekly Chain Store sales had shown in December. The big surprise was the huge revision in the November gain from 1.3% reported to a revised 1.8%.
In November, Motor Vehicle and Parts sales rose 1.2% but Gasoline Stations sales jumped 9.5% as prices rose. The puzzle is that Department Store Type Merchandise (DSTM) sales are reported up 0.8% in November when Chain Store sales were marginally down. Not that the correlation is perfect ( about 70%) but the gap is pretty big.
Many factors were at play in 2009 to suggest caution in analyzing retail trade data:
- The year 2008 ended with the world in economic turmoil. Consumers everywhere just went on strike between August 2008 and April 2009.
- Gasoline prices exploded some 50% from December 2008 to June 2009 and while they were flat the following 6 months, they nevertheless had fairly violent monthly fluctuations. Gasoline stations account for only 10% of total retail sales but price fluctuations can meaningfully influence the total at certain times.
- Auto sales were weak until May but jumped spectacularly in August with the cash-for-clunker program, fell off in September and bounced back up un October.
- Building Materials store sales declined all year long.
The accompanying charts provide a good look at the real trends in retailing as they plot the last 2 years data against their 2-year average. We can see that total retail sales have yet to reach their 2-year average, their December 2009 level remaining below the October 2008 level. Total sales rose 5.4% between December 2008 and December 2009.
Gasoline Stations sales have followed a pattern similar to that of total sales but the amplitude is significantly greater due to gas price fluctuations. gas stations sales jumped 34% in the last 12 months.
DSTM sales are Total Retail sales minus sales covered in the previous 3 charts. Interestingly, DSTM sales have performed better than most other retail segments in spite of the fact that purchase of DSTM is, for the most part, discretionary. So all this talk about the “new normal” is not verified here.
However, the “new normal” can be applied to online shopping, the only segment that, at the end of 2009, is showing sales above its 2008 peak level. Non-Store sales (principally on line at present) in December were 5.1% above their 2 year average, having grown 10.3% in the last 12 months.
By comparison, total retail sales in December 2009 were 0.7% below their 2-year average while DSTM In-Store sales were right on their 2-year average, having gained only 2.3% in the last 12 months.
