September Retail Sales Report: Improvements From Delayed Back-To-School Season

October 16, 2020 - The September advance monthly retail sales report was released on October 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 September report shows growth over August sales across most categories, as the delayed back-to-school shopping season combined with a return to some delayed shopping gave most a boost.

The big winners overall for the year continue to be the same ones from last few months. However, even as they continue to show strength against same-month 2019 sales, they are increasingly off pandemic highs:

• grocery/food retail stores – September 2020 was essentially flat, up 0.1% from August 2020, but September 2020 was still up 10.5% from September 2019 (a trend grocers and other food experts expect to continue as consumers continue to eat and cook at home more than pre-pandemic)
• building materials/garden equipment dealers – September 2020 was only up 0.6% from August 2020 but still up 19.1% from September 2019 (although experts expect the DIY trend to hold, this elevation may falter as the seasons change and weather cools in much of the country; still, September sales were supported by things such as seasonal décor and outdoor heaters)
• retailers that operate outside of brick-and-mortar locations (including e-commerce not linked to conventional stores) – September 2020 was up only 0.5% from August 2020, but September 2020 was still up 23.8% from September 2019 (the convenience of e-commerce will make this trend sticky beyond the pandemic)

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. Consumers are still largely limiting their shopping to these types of retail outlets.   

Sales at sporting goods, hobby, musical instrument, and book stores – which saw rapid gains in June 2020 – experienced declines from that spike during July and August. Still, sales at these retail outlets saw decent gains in September with the back-to-school shopping and fall sports spending with sales up 5.7% over August 2020 and sales in September 2020 were up 14.4% from September 2019.

A few other highlights:

• furniture stores – September 2020 was essentially flat, up only 0.5% compared to August 2020. This category has continued to move into positive territory year-over-year as September 2020 sales were 4.6% greater than in September 2019. Setting up virtual classrooms, home offices, and furnishing home purchases likely contributed to gains here.
• gas stations – September 2020 was up 1.5% from August 2020 but still down 13.3% from September 2019. People continue to leave home less often, and a reduced level of commuting and road-tripping is keeping sales at gas stations low.
• clothing stores – September 2020 was up 11% from August 2020, but still down 12.5% from September 2019. The monthly boost was likely due to back-to-school shopping and the coming change of seasons. Still, bankruptcies are continuing in this market.

• Food services with drinking places continued to see gains, with September sales levels 2.1% higher than those of August 2020, even though they are still seriously lagging 2019 same-month sales (-14.4%).

Economists and other interested parties – including Freedonia analysts – will be closely monitoring next month’s retail sales report to see the strength of sales in October, looking for the impact of the elevated infection levels in many parts of the country and shopping for Halloween and any cues to what the coming gift-giving season might look like if people start their shopping early as expected.

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.