Building Materials stores, at $38 billion, were among the bright spots with record high sales.
By Manuel Gutierrez, Consulting Economist to NKBA
After several consecutive months of increases followed by virtually flat sales for the past two months, November retail sales fell by an unexpected 1.1% to $547 billion. Despite last month’s decline, however, total retail sales are still up 4.1% compared to November 2019.
The drop in November sales suggests caution from consumers reacting to the latest surge of coronavirus cases and to sporadic enforced closings of businesses in various markets. Additionally, business restrictions, such as reduced store hours, as well as consumer reluctance to be in crowds, impacted Black Friday sales. Anecdotal data suggests that foot traffic at stores was down more than 50% from last year.
Last month’s sales decline was broad, with November retail sales falling in virtually all types of stores. The only exceptions were Building Materials stores, which rose 1.1% for the month to $38.3 billion; Food & Beverage stores (including Grocery stores), which increased 1.6% to $71 billion, and Internet & Mail Order sales, which were up a very modest 0.2% to $87.5 billion. These three categories represent just over one-third of total retail sales, so their gains were not sufficient enough to offset the drop in other areas.
The $38 billion in sales at Building Materials stores is a new record. Sales have been mostly rising since the April plunge and rebound that began in May, as is apparent from the left panel of Fig. 2.
This increased pace puts sales for the month of November at 19% above year-ago levels. As seen on the right panel of Fig.2, Building Materials is tracking significantly higher than the 4% increase in total retail sales.
The Food & Beverage category has also been a bright spot during the pandemic, with sales reaching ever higher. They had averaged $57 billion a month for the 12 months before the crisis, but have risen to a $63 billion monthly average since —a 10% jump.
Fig. 3 shows percent sales growth starting in November 2019, and details the three categories recording strong sales compared to the prior month.
Internet sales lead all others with volume in November 29% higher than a year ago. This is followed by sales at Building Materials stores, which posted a 19% jump. Food & Beverage stores are also among the groups exhibiting steady gains.
Sales of Vehicles & Parts have also been tracking ahead of a year ago, but only since this past June.
Fig. 3 also highlights two categories that still lag sales levels of November 2019. Most notably are Gas Stations, with a string of lower sales since November 2019. Currently, they are off by 17% and are still lower that the volume last attained in November 2019.
Sales at Bars & Restaurants are not shown in Fig. 3, but they very closely track Gas Stations. In November, they were 17% lower than a year ago, the same decline as that of Gas Stations.
There are other stores where sales are up over the past year: Furniture stores, with sales of $10.3 billion in November, were 3.6% higher than last year; Health stores were up 3.5%, and General Merchandise stores rose 3.4%.
