Retail sales for 2022 start on strong footing even with challenges, note Commerce and NRF

United States retail sales began 2022 where 2021 ended—with solid growth—amid pairing of the Omicron variant and high levels of inflation, according to data respectively issued today by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that January retail sales—at $649.8 billion—increased 3.8%, from December to January, and were up 13.0% annually. It also noted that total retail sales, from November 2021 through January 2022 saw a 16.1% increase compared to the same period a year ago.

Retail trade sales saw a 4.4% increase, from December to January, and were up 11.4% annually. Gasoline stations saw a 33.4% annual gain and food services and drinking places increased 27.0%, for the same period.

NRF said that in its calculation of retail sales, which excludes automobile dealers, gasoline stations, and restaurants, to focus on core retail, pointed to January seeing a 4.7% seasonally-adjusted gain over December and an 8.5% unadjusted annual gain compared to December seeing a 3.6% sequential decline and up 13% annually, according to NRF. And it added that on a three-month moving average through January, NRF’s retail sales numbers saw a 12.5% unadjusted annual gain.

“January sales overcame major headwinds that make the results all the more impressive,” NRF Chief Economist Jack Kleinhenz said in a statement. “A triad of forces weighed on consumer behavior and spending as weather slammed a large portion of the United States, the omicron variant was relentless, and inflation was escalating. On top of that, the enhanced child care tax credit ceased at the end of 2021, impacting millions of families. Despite all that, consumers ramped up spending even after a record-breaking holiday season.”

NRF said that January sales were up in all but two categories on both a monthly and yearly basis, with year-over-year gains led by clothing and building materials stores and online sales. Specifics from key sectors include:

• Clothing and clothing accessory stores were up 0.7 percent month-over-month seasonally adjusted and up 19.1 percent unadjusted year-over-year;
• Building materials and garden supply stores were up 4.1 percent month-over-month seasonally adjusted and up 12.7 percent unadjusted year-over-year;
• Online and other non-store sales were up 14.5 percent month-over-month seasonally adjusted and up 8.9 percent unadjusted year-over-year;
• Health and personal care stores were down 0.7 percent month-over-month seasonally adjusted but up 7.7 percent unadjusted year-over-year;
• Grocery and beverage stores were up 1.1 percent month-over-month seasonally adjusted and up 7.2 percent unadjusted year-over-year;
• General merchandise stores were up 3.6 percent month-over-month seasonally adjusted and up 6.4 percent unadjusted year-over-year;
• Furniture and home furnishings stores were up 7.2 percent month-over-month seasonally adjusted and up 1.5 percent unadjusted year-over-year;
• Sporting goods stores were down 3 percent month-over-month seasonally adjusted and down 0.8 percent unadjusted year-over-year; and
• Electronics and appliance stores were up 1.9 percent month-over-month seasonally adjusted but down 3 percent unadjusted year-over-year

“After quarantining during the holidays, consumers were eager to leave their home in January and spend money that was buoyed by pent-up savings,” observed Naveen Jaggi, President Retail Advisory Services, JLL, in a research note. “This pent-up consumer demand boosted retail sales across sectors and a demand for retail space was dominated by restaurants, dollar stores, discounters and grocers. According to JLL Retail Research, suburban shopping center foot traffic is back at 2019 levels and we expect these levels to remain the same for the next several months and continue to help retail sales improve.”

Jaggi added that as consumers adjust to the ongoing pandemic and restrictions continue to ease, economic fundamentals will continue to improve, allowing retail sales to be on the rise.

“We expect 2022 to be a strong year for retail,” wrote Jaggi.