Building Materials store sales drop by 3%, its largest decline since last April, but remain near record highs and well above average gains across retail categories.
By Manuel Gutierrez, Consulting Economist to NKBA
Retail sales fell to $562 billion in February, a 3% percent drop from the previous month when sales hit an all-time high of $591 billion. Despite the decline, February sales are 6.3% above the same month last year, just before the pandemic broke out. Sales at that time were $529 billion — which is still $33 billion lower than last month’s total.
Despite slipping in February, retail sales at Building Materials stores are tracking 14% ahead of last year.
The sales falloff last month should not come as a surprise. The lack of additional government spending late last year and a lull between consumer stimulus checks likely led to a consumer pull back. Also, February’s severe cold weather in many parts of the country kept many consumers at home.
In fact, February sales fell across all types of stores, as shown in Figure 2. The largest decline was in Department Stores, where sales dropped by 8.4% to $9.4 billion. This is part of the larger trend of traditional brick-and-mortar shopping losing ground to the internet and specialty stores for over a decade. In fact, compared to last year, shown in the right panel of Figure 2, Department Store sales are 14.5% lower.
Other areas with large sales declines include Sporting Goods stores, down 7.5% to $7.6 billion, and Internet sales, which are off 5.4% to $86.7 billion.
Even Autos & Other Vehicle retailers, which account for one-fifth of all retail sales, fell in February (-4.5%). Total sales in this group were $106 billion for the month, but remain comfortably ahead of last year by 9.5%.
Closer to K&B-related industries, sales at Building Materials stores fell by 3% last month. This is its largest monthly decline since April 2020, when sales dropped by 15% as a result of the government’s business shutdowns.
February sales, as seen in Figure 3, were down to $39 billion. Nevertheless, sales at Building Materialsstores are still near record levels. January marked the highest monthly volume ever.
On an annual basis, retail sales in February are 14% above the same month last year. In fact, the right panel of Figure 3 shows the annual sales change since February 2020. it has been above the prior year for each month since April. Additionally, the sales pace at Building Materials stores has exceeded the national retail average by nearly 10 percentage points throughout this period.
