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Freedonia Market Research Blog December Retail Sales Report a Positive One for Building Materials Retailers

December Retail Sales Report a Positive One for Building Materials Retailers

by Freedonia Industry Studies

January 28, 2022

The release of the December 2021 retail sales report was in general a positive one for retailers of building materials and garden equipment and supplies. Sales in December declined around 3% from their November level. This monthly fall in sales activity can be attributed to a number of factors, such as:

  • supply chain difficulties that led to shortages of popular items often purchased at these stores, such as appliances
  • the onset of winter weather, which causes many DIYers and some contractors to put off outdoor work, such as the installation of decks – thus affecting lumber sales
  • the muted nature of many holiday gatherings due to the COVID-19 pandemic – many people delayed large family gatherings to minimize the risk of COVID, and thus put off purchases of gifts

For the year, though, overall retail sales by building materials and garden equipment and supplies were up 13.5% from 2020. This surge was spurred by:

  • high lumber prices – for most of the year, lumber prices remained well above their historical average
  • continuing high levels of housing starts and home remodeling activity, fueling demand for a wide range of building materials most often purchased at big-box retailers and hardware and garden stores
  • increased homeowner interest in outdoor activities, such as gardening, supporting purchases of seed, fertilizer, and related products

Industry professionals are remaining optimistic that the strong sales of 2021 will carry over to 2022. Home building and home remodeling activity remains high, while many consumers – despite rising inflation – are looking to upgrade their homes by replacing older appliances, applying a fresh coat of paint, and – once the weather clears – engaging in some landscaping work. 

TFG analysts will continue to monitor retail sales – as well as numerous other indicators – to gauge their effects on the US economy going forward.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

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