June Retail Sales Report: Fast Growth From a Low Base

The June advance monthly retail sales report was released on July 16. One thing worth noting -- for the uninitiated -- is that this information is linked to sales by type of retail outlet, but that doesn’t fully align with sales of product categories in some cases. For instance, sales of sporting and recreation goods might be lower than one would expect because the data only count sales at stores that primarily sell these products and do not include items in this category that are sold at mass merchants like Walmart and Target, whose sales are classified elsewhere.

The June report show that the big winners overall continue to be the same ones from last month, however, even as they continue to show strength against same month 2019 sales, they are off May 2020 highs:

• grocery/food retail stores (-1.2% from May 2020, but +12.4% from June 2019)
• building materials/garden equipment dealers (-0.3% from May 2020, but +17.3% from June 2019)
• retailers that operate outside of brick-and-mortar locations (including e-commerce not linked to conventional stores) (-2.4% from May 2020, but +23.5% from June 2019)

These are retailers that, for the most part, remained open during stay-at-home orders because they were considered “essential” businesses. Additionally, their product mix includes categories that continue to benefit from the shift toward staying home – e.g., home cooking over eating out and DIY home and garden improvements.   

The new big area -- coinciding with reopening as well as the rise in staycations and backyard play installations -- is sporting goods, hobby, musical instruments & book stores. This category is +26.5% from May 2020, and also +20.6% from June 2019.

Several other categories are also showing big gains over very low May sales levels, even though they are still seriously lagging 2019 same-month sales. Coinciding with the ongoing reopening of these locations. These businesses include:

• furniture stores (+32.5% from May 2020, but -3.5% from June 2019)
• gas stations (+37.4% from May 2020, but -19.1% from June 2019)
• clothing stores (+105.1% from May 2020, but -23.2% from June 2019)
• foodservice (+20% from May 2020, but -26.3% from June 2019)

Economists and other interested parties – including Freedonia analysts – will be closely monitoring next month’s retail sales report to see the strength of sales growth for July, looking for the impact of the resurgence in infections, mask mandates, and reclosures of some businesses in some states/municipalities.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the COVID-19 with a comparison to historical recessions. Food- and beverage-related reports are also available from our sister publisher, Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.