Information by distribution channel

Retail Channel Monthly $ Update – January Final & February Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We will look at the latest release of both reports. We will begin with the Final Retail Report from January and then move to the Advance Retail Report for February. Remember, January and February 2020 were pre-pandemic, but we will continue our detailed comparison of 2021 to both 2020 and 2019 to track the ongoing evolution of the retail market.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2020 and 2019
  • Current YTD change – % & $ vs 2020 and 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

First, the January Final. U.S. Retail hit bottom in April then began to recover, hitting record $ in December. January $ fell but still set a monthly record. Here are the major retail groups. (Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $9.8B more than the Advance report projected a month ago. All Groups were up but most of the positive change came from Relevant Retail: +$6.2B; Restaurants: +$0.9B; Auto: +$1.8B; Gas Stations: +$1.0B. Only Gas Stations and Restaurants were up vs December, but Total Retail still set a January record. Total $ales finished strong in December and had a good start in 2021 thanks to another strong month from Relevant Retail and Auto. Restaurants and Gas Stations continue to struggle. Relevant Retail is still the driving force in the recovery.

Now, let’s see how some Key Pet Relevant channels were doing in January.

  • Overall– All 11 channels were down vs December, but 10 of 11 were up both vs 2020 and 2019. A great start.
  • Building Material Stores – Their lift continued into the new year. We should note that the bulk of the ongoing surge came as a result of pandemic spending patterns developed in 2020. They’re still showing double digit % increases. Sporting Goods stores are not in this group, but they have a similar spending pattern. Sales took off in May, hitting a record peak in December. The lift continued in 2021 – up 36.2% over 2019 and 44.4% over 2020.
  • Food & Drug – Supermarkets finished 2020 up +$77.7B. Sales dipped slightly in January but are still +10.9% vs 2020. Drug Stores ended up +$17B (+5.7%) for 2020. Their $ also fell in January but are still +4.5% vs 2020.
  • General Merchandise Stores – $ in all channels fell a lot from December. However, Clubs/SuperCtrs, $ Stores and even Discount Dept. Stores had a strong January. Last year they were up a combined $1.5B from 2019. This year they are up $7.2B from 2020. Value has become even more important due to the pandemic.
  • Office, Gift & Souvenir Stores– Sales plummeted in January. Their struggles continue. Recovery is a long way off.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth. In January they were up $22.1B (+42.8%) vs 2019. 78.7% of that growth (+$17.4B) came from the pandemic lift spending pattern set in 2020.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. Stores began reopening in May and the $ grew. Their 2020 total sales were up +11.6%. January sales are +$1.0B (+14.4%) vs 2020. However, that is less than last year when they were +$1.2B (+21%) vs 2019.

The Relevant Retail Segment began recovery in May and reached a record level in December. $ plummeted in January but still set a monthly record. The key drivers in the continued strong growth of this group were and are the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, here are the Advance numbers for February.

2020 will always be a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history. Then sales began to recover and in October YTD Total Retail turned positive for the 1st time since February. In December, Total Retail broke the $600B barrier – a historic first. Monthly sales records continued in January and now February. The primary drivers of this are Relevant Retail and Auto. Restaurants are the only big group still suffering across the board. As we progressed through 2020 and now into 2021, we have seen real evidence of the strength and resiliency of the U.S. Retail Market.

Total Retail – Spending fell in February but still was a record high for the month. $ were up 2.4% vs 2020 but 10.7% vs 2019. Most of the lift came last year. YTD $ are also showing strength but this was mainly due to a spectacular January.

Restaurants – This is the only group in which spending was down in all measurements. Last February sales were up vs January and February 2019. The Pandemic changed that. YTD sales are also down -10.7% from 2019. However, this was primarily due to the -$12.7B drop in February $ from 2020. Recovery is still a long way off.

Automobile & Gas Stations – Staying home causes your car to be less of a focus in your life. Auto Dealers combated this attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. Gas Station $ales are a mixed bag. They were still behind 2020 in February and YTD but ahead of 2019 sales in both measurements. It looks like they are beginning their comeback.

Relevant Retail – Less Auto, Gas and Restaurants – When you look at the individual channels in this group, you see a variety of results due to many factors – non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December ($411B). They finished 2020 up $251B, +6.8%. Sales fell in January but have continued to set monthly records through February. They are up $20.4B, +7.2% vs February 2020 and  +$57.9B, +10.1% YTD. Relevant Retail has now posted positive numbers versus last year and YTD for 10 consecutive months and their average YTD growth rate since 2019 now stands at +7.8%. The primary drivers continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus a never ending “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels. Relevant retail was down vs January but continues to set monthly sales records. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets. We will continue to track 2021 monthly and YTD sales vs both 2020 and 2019.

Sales in 12 of 13 channels were down vs January. 8 channels beat February 2020 $ and 10 beat February 2019 $. In YTD $ales, 10 channels beat both 2020 and 2019.

After April’s widespread closures there was a retail surge in May, but things truly opened up in June/July. In Aug/Sept, sales slowed but growth began again in October and peaked with a record December. Relevant Retail finished  +$252.9B vs 2019 and has started 2021 strong, +10.1% YTD. Essential channels are responsible for the continued lift, primarily:

  • Nonstore Retailers – Online shopping continues to grow in households and $.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm– Their “Spring” lift continues unabated as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – In 2020 they kept the whole Gen Mdse channel positive. Their growth slowed in February but their continued success clearly shows that value is still a major consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Sales dropped so much from January that they were down vs February 2020. This was due to the continued negative performance by Department Stores and slowed growth by Club/SuperCtr/$ stores, +3.6% in February, down from +9.6% in January.

Food and Beverage, plus Health & Personal Care Stores – In February, growth slowed to +6.7% in the Grocery segment, compared to +11.3% in January. Sales in the Health, Personal Care group finished 2020 at +1.7%. They started 2021 even better, +3.3% in January, but that slowed to +2.4% in February. Drug Store $ remains the key to health/personal care.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – Home Furnishings began their recovery in January and are now positive in both monthly and YTD $ vs 2020 and 2019. Electronic & Appliance stores remain negative across the board, but the gap is narrowing. Clothing Stores continue to be hard hit by the pandemic, but they were the only channel to increase sales vs January. There is still hope.

Building Material, Farm & Garden & Hardware – Their Spring lift began on time in 2020 and it has essentially never stopped. They have greatly benefited from consumers turning their focus to their home needs. They finished 2020 +53B (+13.8%). In February they were up 11.1% vs 2020 and +13.1% YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open but make no mistake, Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. Sales fell in February after a record January performance, but they were still +11.0% vs February 2020 and +17.8% YTD.

All Miscellaneous Stores – Pet Stores are in this group and deemed essential but most other stores are not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 down $1.0B, -0.7%. January sales were +6.9% vs 2020 but February sales were actually down -0.01% vs 2020. Their $ are +2.5% YTD so they are recovering but it may not be a fast process.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis accelerated the movement to online retail. In February 2020 NonStore $ were 8.6% YTD. In December monthly sales exceeded $100B for the 1st time. They ended 2020 at +21.9%, +$173.9B YTD. Their increase was 69% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and they started off 2021 even better. February is +23.5% vs 2020 and YTD $ are +25.4%. Remember, this is their slowest season.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – 2020 was a year of ups and downs – April and May were the 2 biggest year over year monthly sales declines in history while December saw sales break $600B for the first time. Restaurants, Auto and Gas stations were impacted the most. Auto had recovered by yearend and started 2021 out strong. Gas Stations had a terrible 2020 but are now showing mixed results in 2021. Restaurants continue to show the most negative impact from the pandemic. The Relevant Retail segment has been the only ongoing positive, but for some segments in this group there is still a long way to go. Total Retail Sales ended the year +$37B (+0.6%) vs 2019. Through February Relevant Retail and Auto are both +10% vs 2020, which has pushed Total Retail to +5.1%. For Gas Stations and especially Restaurants the problems continue. As the battle to return to normal goes on, we will continue to provide regular updates. The March data should be especially interesting as we will compare 2021 to 2020 (Pandemic Impact Begins) and to 2019 (Old Normal).

Retail Channel Monthly $ Update – December Final & January Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We will look at the latest release of both reports. We will begin with the Final Retail Report from December and then move to the Advance Retail Report for January. This will allow us to look at both the final numbers for 2020 and do an initial comparison of January 2021 vs 2020.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month one year ago.
  • Current YTD change – % & $ vs 2019 (Note: In the January Advance we will compare January 2020 to 2019)
  • Monthly and Year To Date $ will also be shown for each group/channel

First, the December Final. U.S. Retail hit bottom in April then began to recover. December $ were up from November, and still growing vs 2019. Here are the major retail groups. (The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $3.4B less than the Advance report projected a month ago. All but Gas Stations were down but most of the reduction came from Relevant Retail: -$2.5B; Restaurants: -$0.1B; Auto: -$0.6B; Gas Stations: N/C. All groups were up vs November and set a new record Total Retail $ peak. YTD Total $ales finished more positive vs 2019 thanks to another strong month from Relevant Retail and Auto. The Auto segment finally beat 2019 $, but Restaurants and Gas Stations are down -$229B. Relevant Retail was the driving force in turning Total YTD sales positive vs 2019.

Now, let’s see how some Key Pet Relevant channels were doing in December.

  • Overall– $ in 10 of 11 groups were up vs November and 9 were up vs December 2019 and YTD. That’s very good.
  • Building Material Stores – Their “Spring” lift continued through Summer, Fall and now Winter. While sales peaked in June, they’re still showing double digit % increases vs 2019. Sporting Goods stores are not included in this group, but they have a similar Spring lift pattern. Their sales took off in May, and ultimately hit a record peak in December. In June, their YTD $ vs 2019 turned positive and by yearend they were up 16.6%.
  • Food & Drug – Supermarket $ slowed in Aug, Sep & Nov but turned up in October & December. They finished 2020 up +$77.7B. Drug Stores $ dipped in Aug & Nov but increased in Sep, Oct & Dec. They ended up +$17B.
  • General Merchandise Stores – $ in Clubs/SuperCtrs slowed in September then grew in Oct>Dec. They finished at +$33.2B vs 2019. $ Stores sales slowed from June>Sept but grew in Oct>Dec and ended 2020 +12.0% vs 2019. Discount Dept. store sales were slowing before the pandemic. This trend continues despite their Nov>Dec lift.
  • Office, Gift & Souvenir Stores– A 44% lift after a 28% November drop . A holiday lift but recovery is long way off.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. $ hit another record peak in December. Many consumers have discovered online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. The others began reopening in May. That number grew in June and YTD $ surpassed 2019. Sales have been stable and strong vs 2019 since then and peaked in December. Their 2020 total sales were up +11.6%.

The recovery began in May and accelerated in June>July as even more businesses began to re-open. The Relevant Retail Segment was positive in all measurements in May>July. In Aug>Sept $ slowed but were still strong vs 2019. In Oct>Dec $ turned up and reached a record peak. The key drivers in the positive numbers vs 2019 were the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm.  Now, how is 2021 starting off? Here are the Advance numbers for January.

April & May 2020 were the 2 biggest spending drops in history. Then sales began to recover and in October YTD Total Retail turned positive for the 1st time since February. Sales dipped in November but not vs 2019 . In December, Total Retail set a sales record. In January, as expected, $ fell but still set a new record high. All but Gas Stations and Restaurants are up from 2020.

Total Retail – Total Retail spending hit a record $616.6B in December and 2020 finished +$37B vs 2019. As usual, $ plummeted in January but still hit a record $509B, $27.9B ahead of 2020 and $51.7B ahead of 2019. (add the $ changes in the 2 columns to get status vs 2019). Remember, the impact of the pandemic didn’t begin until March 2020.

Restaurants – Spending was basically unchanged vs December but down $9.6B versus 2020, which shows the continuing impact of the pandemic on this group. Last January, $ fell 7% from December but were up 7.1% from 2019. Normally, January and February are the 2 slowest months, but they finished on top last year. Their 2020 totals were down $149B,  -19.5%. Recovery is still a long way off. If 2019 $ are the target for a return to normal, then they are only down $5.6B.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers began combating this attitude with fantastic deals and a lot of advertising. Monthly $ turned positive versus 2019 in June and stayed that way, finishing 2020 at +1.0% vs 2019. 2021 started even stronger, +10.4%. Gas Station $ales hit bottom in April and have been up and down ever since. However, sales have remained consistently about 16% below 2019. They finished 2020 -$79.6B (-15.9%). January began down $3.4B but we should note that $ were up $0.1B vs 2019.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses shuttered their doors in March but there was a rash of binge/panic buying for “necessities”, especially groceries, which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction and growth continued through July. $ales fell in Aug/Sept but turned up again in Oct>Dec, reaching a record $412.9B in December. For 2020, they were up $252.9B, +6.8%. That brought us to January. Sales fell 22.5% (-$92.7B) from December. However, that was less than the 24.5%     (-$93.7B) drop in 2020. So $ are up 10.8%, triple the 3.6% from a year ago and the Relevant Retail group now has posted positive numbers versus last year and YTD for 9 consecutive months. The primary drivers continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus a radically extended “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels. After a record December, relevant retail $ took an expected plunge in January but was still +$31.3B vs 2020. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

In December, all 13 channels beat last month’s $. In January they were all down. 10 channels beat January 2020 $. Last year 12 beat 2019 $. However, the 2021 increases were generally significantly higher than 2020. Clothing stores had the biggest decrease vs 2020 but Department stores are the only channel with decreases in both years.

After April’s widespread closures there was a retail surge in May, but things truly opened up in June/July. In Aug/Sept, sales slowed but growth began again in October and peaked with a record December. Relevant Retail finished up $252.9B vs 2019 and started 2021 strong, +10.8%. Essential channels are responsible for the continued lift, primarily:

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm– Their “Spring” lift continues unabated as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow vs the previous year. They turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – As expected Sales dropped in January after the holiday lift with the biggest % decrease coming from Department Stores. Their problems were amplified by the pandemic but existed before as they are the only channel down in January vs a year ago for 2 consecutive years. Club/SuperCtr/$ stores are still the big positive force. They finished 2020 up $33B, +7.4% and started off 2021 at +9.6%, considerably better than the +3.5% in January 2020.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still strong and growing, +11.3% in January, due to the continuing big drop in restaurant sales. Sales in the Health, Personal Care group turned positive vs 2019 in September and finished +1.7%. They started 2021 even better, +3.3%. Drug Store $ growth has been the driver.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – Except for September, monthly sales have grown every month since May. All 3 channels finished the year down significant percentages in sales vs 2019. Clothing Stores have been the worst performers and that continued in January. Home Furnishing stores may be breaking the pattern in 2021. In January, their sales were up 9.3% vs 2020. Perhaps their recovery has truly begun.

Building Material, Farm & Garden & Hardware – Sales peaked in late spring, as usual. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. Their Spring lift extended into winter and they finished +$53B (+13.8%). No change for 2021 – January $ +13.7% vs 2020.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers are seeking more recreation. They were down -$3.4B in April. This deficit was wiped out in September and driven by Sporting Goods stores, sales exploded in December. They ended 2020 up $4.4B, +5.5%. January 2021 sales fell 35.8% from December but they are still up an amazing 22.0% vs January 2020.

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound in May and grew through July when they finally beat the monthly sales for 2019. Sales seesawed up and down but finished with a strong December. They ended 2020 down $1.0B, -0.7%. They started out 2021 +6.9% but this is only about half of the +13.3% start in 2020. We’ll see how their recovery progresses in 2021.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. In December monthly sales exceeded $100B for the 1st time. They ended 2020 at +21.9%, +$173.9B YTD. Their increase is 69% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeds their 12.9% annual increase in 2019 and they started off 2021 even better, +22.1%. Last January, in pre-pandemic times, they were only up 7.1%.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July, but results were mixed until yearend. The Auto segment did beat 2019 YTD $ in December, but Restaurants and Gas Stations finished down -$229B. The Relevant Retail segment was the only true positive. Sales began to recover in May and hit a record high in December. They finished 2020 up $253B but for some segments in this group there is still a long way to go. Total Retail Sales passed 2019 in October, set a new monthly $ record in December and ended the year +$37B (+0.6%) vs 2019. In 2021 Relevant Retail and Auto both began the year at +10% vs 2020, much better than last year. For Restaurants and Gas Stations the problems continue as both started off 2021 down significantly vs 2020. Thanks to Auto and Relevant Retail, Total Retail is +5.8% vs 2020. (last year they were +5.2%) However, this is an ongoing battle. We will continue to monitor the data and provide you with regular updates.

 

 

 

 

Retail Channel Monthly $ Update – November Final & December Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We will look at the latest release of both reports. We will begin with the Final Retail Report from November and then move to the Advance Retail Report for December. We will track the consumers’ evolving behavior in terms of channel migration but importantly, in this report, we will get the initial comparison between yearend $ for 2020 vs 2019.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

First, the November Final. U.S. Retail hit bottom in April then began to recover. November $ were down from October, but still growing vs 2019. Here are the major retail groups. (The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $2.7B less than the Advance report projected a month ago. The groups were up and down but most of the reduction came from Relevant Retail: -$3.0B; Restaurants: +$0.4B; Auto: -$0.3B; Gas Stations: +$0.2B. All groups but Relevant Retail were down after the October Total Retail $ peak. However, YTD Total $ales grew more positive vs 2019 thanks to another strong month from Relevant Retail and an OK month by Auto. The Auto segment is almost equal to 2019 $, but Restaurants and Gas Stations are down -$210B. Relevant Retail remains the only positive group in YTD sales.

Now, let’s see how some Key Pet Relevant channels were doing in November.

  • Overall– $ in 6 of 11 groups were up vs October and 9 were up vs November 2019 and YTD. That’s pretty good.
  • Building Material Stores – Their “Spring” lift continued through Summer and now into Fall. While sales peaked in June, they’re still showing double digit % increases vs 2019. Sporting Goods stores are not included in this group, but they have a similar Spring lift pattern. Their sales took off in May, peaked in June but have continued to grow vs 2019. In June, their YTD $ vs 2019 turned positive and by November they were up 15.4%.
  • Food & Drug – Supermarket $ slowed in Aug/Sep turned up in October then flattened in November. They are +$71.6B YTD. Drug Stores $ dipped in August, grew in Sep/Oct, then fell again in November. They’re +$14B YTD.
  • General Merchandise Stores – $ in Clubs/SuperCtrs slowed in September then grew in Oct/Nov. They are now +$30.8B vs 2019. $ Stores sales slowed from June>Sept but grew in Oct/Nov and are now +12.4% vs 2019. Discount Dept. store sales were slowing before the pandemic. This trend continues despite their November lift.
  • Office, Gift & Souvenir Stores – A 28% drop after a 20% October lift . Recovery is long way off.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. Sales hit another new peak in November. Many consumers have discovered online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. The others began reopening in May and the number grew in June which produced an increase vs 2019. Sales peaked in July but have remained stable and strong vs 2019. In fact, YTD sales are up +10.2%.

The recovery began in May and accelerated in June>July as even more businesses began to re-open. The Relevant Retail Segment was positive in all measurements in May>July. In Aug>Sept $ slowed but were still strong vs 2019. In Oct>Nov $ turned up and reached a new peak. The key drivers in the positive numbers vs 2019 remain the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm.  How are things progressing? Here are the Advance numbers for December.

April & May were the 2 biggest spending drops in history. In June, sales increased and continued to grow in July. $ fell in Aug/Sept. but in October, all groups spent more, turning YTD Total Retail positive for the 1st time since February. Sales dipped in November but not vs 2019 . In December, all groups spent more so the YTD Total Retail increase vs 2019 grew.

Total Retail – Total Retail spending hit a record $620B in December, up $74B from November and $28.7B from 2019. In February YTD 2020 sales were up $60B, +6.6%. Then came COVID-19. We hit bottom at -$112B YTD in May and began moving in the right direction. We broke even in October and are now up $40.2B, but still down -$20B from February.

Restaurants – Spending grew +$0.9B from November but was -$13.7B (-21%) below December 2019. Sales hit bottom in April due to forced closures. Re-openings began in May but have been mixed due to a virus resurgence. YTD $ales have stayed about 20% behind last year. January and February, normally the 2 slowest months, are on top in 2020. In February YTD sales were up $9B. They finished 2020 -$149B, (-19.5%). Delivery/pickup couldn’t make up the difference.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers began combating this attitude with fantastic deals and a lot of advertising. Monthly $ turned positive versus 2019 in June and have stayed that way. Sales dipped in November but rose spectacularly in December. They are now +1.1% YTD vs 2019. Gas Station $ales hit bottom in April and have been up and down ever since. However, YTD sales have remained consistently about 16% below 2019. At yearend they are -$79.6B (-15.9%). People are still not driving as much.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses shuttered their doors in March but there was a rash of binge/panic buying for “necessities”, especially groceries, which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction and growth continued through July. $ales fell in Aug/Sept but turned up again in Oct/Nov. We should note that the monthly June>November $ were larger than all months in 2019 but December. In December 2020, spending skyrocketed, up $57B from November and $33B from 2019. The Relevant Retail group now has posted positive numbers versus last year and YTD for 8 consecutive months and is up $255.1B YTD (+6.9%) vs 2019. In May when the streak began, it was up +2.7%. The primary drivers were Nonstore, Grocery, SuperCenters/Clubs & $ Stores plus an “extended” spring lift from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels across America. In December, consumer spending in the relevant retail market passed $400B for the first time. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

All 13 channels beat last months $. In November it was only 9. In September & October 10 channels beat the same month in 2019. This number dipped to 9 in November & December. In YTD $, 8 are showing an increase, the same as it’s been since September. The YTD decreases are coming from channels that are primarily nonessential businesses.

After April’s widespread closures there was a retail surge in May. Things truly opened up in June & July and sales continued to increase. In August/September, they slowed. Growth started again in October/November and took off in December. Relevant Retail is up $255.1B vs 2019. Essential channels are responsible for the YTD lift vs 2019, primarily:

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm– Their “Spring” lift continues unabated as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow vs 2019. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Sales grew vs November but not vs 2019 because Department Stores continue to fade, down -20% vs December 2019. Club/SuperCtr/$ stores are still the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. Since May we have seen sales return to a more normal, strong pattern in these big and small value stores, including a 6% increase vs December 2019.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still strong and growing, +$76.4B YTD, due to the continuing big drop in restaurant sales. Monthly Sales increased in the Health, Personal Care group. Their $ have been up vs 2019 since June and YTD turned positive vs 2019 in August. Drug Store $ growth has been a key factor.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – Except for September, monthly sales have grown every month since May. All groups increased sales vs November with Clothing & Accessories leading the way at +50.1%. All 3 channels are down significant percentages in YTD sales. Clothing Stores are the worst performers. In December they were down 12.1% vs December 2019 and 26.4% YTD. Together, these groups are down $91B vs 2019.

Building Material, Farm & Garden & Hardware – Sales peaked in late spring, as usual. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. This has extended their “Spring” lift indefinitely? $ were up 21.9% vs December 2019 and up +$53.7B (+14.0%) YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers are seeking more recreation. Sales exploded in December with the most monthly $ in 4 years, up 35.8% vs last month and 17.2% vs December 2019. In April, their YTD $ were -$3.4B. This deficit was wiped out in September and through December, YTD sales were +$5.7B (+4.5%). Their holiday lift far exceeded 2019.

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound in May and grew through July when they finally beat the monthly sales for 2019. In Aug>Sept sales plateaued. They turned up in October, down in November, then up strong in December. In February, they were up $2.6B YTD. At yearend they are down -$1.6B, a difference of $4.2B. Recovery will have to come in 2021.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. In December monthly sales were the highest for any month in history and the 1st month to exceed $100B. They are now up 22.1%, +$176.0B YTD. Their increase is 69% of the total $ increase for Relevant Retail Channels. They are the clear leader, and their performance far exceeds their 12.9% annual increase in 2019. 2020 was a key waypoint for NonStore Retailers.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July, but results have been mixed since then. All were down in September, up in October, down in November and finally up in December. The Auto segment passed 2019 YTD $ in December but Restaurants and Gas Stations are still struggling. The Relevant Retail segment has been the only true positive. Sales slowed in Aug>Sep. but then began grow again, hitting a record high in December. Their Monthly and YTD sales vs 2019 are now up for 8 consecutive months. Overall, they are +$255B YTD but for some segments in this group there is still a long way to go. Total Retail Sales peaked in December setting a new monthly $ record. In October Total Retail passed 2019 YTD $ and is now up +$40.2B (+0.6%) vs 2019. The growth has continued despite a surge in the virus. However, this will be a long battle. We will continue to monitor the data and provide you with regular updates.

 

 

 

 

Retail Channel Monthly $ Update – September Final & October Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

This means to get the full picture in our monthly channel update we need to look at the latest release of both reports. We will begin with the Final Retail Report from September and then move to the Advance Retail Report for October. This will also allow us to better track the consumers’ evolving spending behavior in terms of channel migration.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

First, the September Final report. The retail market hit bottom in April then began a slow recovery. Sales $ peaked in July but are growing vs 2019. Here are the major retail groups. (The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $2.8B more than the Advance report projected a month ago. Auto $ were the same as projected. Everyone else was up. Relevant Retail: +$2.5B; Restaurants:+$0.1B; Gas Stations:+$0.2B. $ales were still down from the  peak in all groups. However, driven by Relevant Retail, +$38B and Auto, +$14B, monthly sales were up $38B vs 2019.

An August > September decline in sales is normal. In 2019 the drop was -9%. In 2020 the drop was much smaller, only -3% , which is a good sign for a retail recovery. However, all groups but Relevant Retail are still down YTD vs 2019.

Now, let’s see how some Key Pet Relevant channels were doing in September.

  • Overall – $ in 7 of 11 groups were down vs August, but 10 of 11 were up vs September 2019 and 9 were up YTD.
  • Building Material Stores – This group has their biggest annual lift in Spring. This is unchanged and even stronger. While sales peaked in June, they’re still showing strong increases vs 2019. Although Sporting Goods stores are not included in this group, they have a similar Spring lift pattern. Their sales took off in May, peaked in June but continued to grow vs 2019. In June, their YTD $ vs 2019 turned positive and by September they were up 13.1%.
  • Food & Drug – $ fell in August & September but Supermarkets are maintaining incredibly strong growth vs 2019. Drug Stores $ bounced back after a decline in August and remain positive compared to 2019.
  • General Merchandise Stores – $ in Clubs/SuperCtrs stabilized in June and fell in September but are still strong vs 2019. Despite slowed sales in June>Sept, $ Stores are showing exceptional strength vs 2019. Discount Dept. store sales were generally slowing before the pandemic. This trend has continued despite a small Summer lift.
  • Office, Gift and Souvenir Stores – They were slow to re-open. $ grew but now are stable. They were hit hard.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. Sales peaked in August, but the crisis has introduced many new consumers to online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. The others began reopening in May and the number grew in June which produced an increase vs 2019. Sales peaked in July but stabilized and remain strong vs 2019. In fact, YTD sales are up +10.2%.

The recovery began in May and continued in June and July as even more businesses began to re-open. The Relevant Retail Segment turned positive in all measurements in May and stayed that way through July. In August & September, sales fell but remained strong vs 2019. The key drivers in the positive numbers vs 2019 were the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm.  How are things progressing? Here are the Advance numbers for October.

April and May were the 2 biggest spending drops in history. In June, monthly sales turned positive for the first time since February. The recovery continued in July but flattened out in Aug/Sept. In October, all groups spent more than in September. This lift turned YTD Total Retail positive for the 1st time since February.

Total Retail – Total Retail spending rose +$23.1B vs September and was up +6.0% vs October 2019. In February 2020 sales were up $60B, +6.6% YTD versus 2019. Then came COVID-19. Hopefully, we hit bottom at -$112B in May. We began moving in the right direction and finally broke even in October up $1.1B YTD but still down -$59B from February.

Restaurants – Spending increased +$2.7B from September but was still down -$8.0B vs October 2019. Things remain Topsy Turvy. August is usually their biggest $ month of the year. January and February, normally the 2 slowest months, are on top in 2020. In February YTD sales were up $9B. Then came the forced closures. Re-openings began in May but ran into problems in the Summer. Delivery/Pickup can’t make up the difference as spending is now down $123.5B YTD.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers began combating this attitude with fantastic deals and a lot of advertising. Monthly $ turned positive versus 2019 in June and have maintained this pace through October. The result is that this group is now only down -0.3% YTD vs 2019. Gas Station $ales increased in May>July over the previous month but fell in August & September. Sales turned up again in October but remain (-$67.8B YTD) People are still not driving as much, for commuting or road trips.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses shuttered their doors in March but there was also a rash of binge/panic buying for “necessities” and a big lift in groceries as consumers focused on home cooking which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction. In June and July, the $ growth continued. $ fell in August & September but turned up again in October. We should note that the monthly June>October $ are larger than all months in 2019 but December. The primary drivers have been Nonstore, Grocery and SuperCenters/Clubs & $ Stores along with a big spring lift from the Hardware/Farm and Sporting Goods channels. The Relevant Retail group now has posted positive numbers versus last year and year to date for 6 consecutive months and is up $195.1B YTD (+6.5%) vs 2019. In May when the streak began, it was up +2.7%.

Now let’s look at what is happening in the individual retail channels across America. In October, consumer spending in the relevant retail market grew even more positive versus 2019. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

In September only 3 channels beat last months $. In October it was up to 11. In September, 10 channels beat September 2019. This number held in October. In YTD numbers, 8 are showing an increase – the same as September. The YTD decreases are coming from channels that are primarily nonessential businesses.

After a full month of stay at home and widespread closures there was a surge in May. Things truly opened up in June and July and sales continued to increase. In August and September, they slowed then grew again in October. Relevant Retail Channels are up $195.1B vs 2019. The essential channels are responsible for the YTD lift vs 2019, primarily:

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm– A big Spring lift continues into the Summer/Fall as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow vs 2019. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Regular Department stores are reopening which has cut the losses for total Department Stores as Discount Department stores continue to slowly fade. Club/SuperCtr/$ stores provided the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. Since May we have seen consumer spending return to a more normal pattern in the big and small stores that promise value.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still driven by increased Food sales due to a slow restart by restaurants, up 10.3%, +$5.9B in October. Monthly Sales in the Health, Personal Care group have been up vs 2019 since June. Since August, the YTD $ have been positive. Drug Store $ growth was a key factor.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – Except for September, monthly sales have grown every month since May. Home Furnishing was the only group with a decrease vs September, but they have had 5 consecutive monthly increases vs 2019. All 3 channels are down significant percentages in YTD sales. Clothing Stores are by far the worst performers. In October they were down 11.3% vs October 2019 and 30.0% YTD.

Building Material, Farm & Garden & Hardware – Sales peaked in the Spring. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. This has extended their Spring lift to Summer/Fall. $ were up 17.0% vs October 2019 and up +$42.9B (+13.2%) YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers again sought outdoor recreation. Although October sales fell again from their June peak, they were up 14.1% vs October 2019. YTD sales were down $3.4B in April. In September, this deficit was wiped out and through October YTD sales were +$1.8B (+2.8%).

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales began to rebound in May and grew through July when they finally beat the monthly sales for 2019. In Aug>Sept sales plateaued then turned up in October. Back In February, this group was up $2.6B YTD. Through July,  they were down -$3.2B but moving in the right direction. The lift in October has put them back on track, -$2.4B. However, they still have a long road ahead.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. In October they reached a new monthly sales peak for the year and they are up 21.9%, +$137.2B YTD. Their increase is 70% of the total $ increase for Relevant Retail Channels. They are the clear leader, and their performance far exceeds their 12.9% annual increase in 2019. Since much of their annual increase comes from holiday sales, 2020 could be another great year for NonStore Retailers.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July. By September, all had decreased sales but $ turned up again in October. The Auto segment is almost back to even in YTD vs 2019 but Restaurants and Gas Stations are still struggling. The Relevant Retail segment has been the only true positive. Sales turned up in October after slowing in Aug>Sep. Monthly and YTD sales vs 2019 are up for 6 consecutive months. However, for some segments in this group there is still a long way to go. Total Retail reached a new $ peak in October and edged past YTD 2019, +$1.1B (+0.02%). Now the virus is resurging, and retail restrictions may be reimposed in many areas. This is going to be a long battle with no end in sight.

We will continue to monitor the data and provide you with regular updates.

 

 

Retail Channel Monthly $ Update – August Final & September Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

This means to get the full picture in our monthly channel update we need to look at the latest release of both reports. We will begin with the Final Retail Report from August and then move to the Advance Retail Report for September. This will also allow us to better track the consumers’ evolving spending behavior in terms of channel migration.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

We’ll start with the August Final report. The retail market hit bottom in April then began a slow recovery, which peaked in $ in July. Here are the major retail groups. (The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $0.8B more than the Advance report projected a month ago. All but Restaurants (-$0.2B) were up slightly from projections. Relevant Retail: +$0.5B; Auto:+$0.2B; Gas Stations:+$0.2B. $ales were down from the July peak in all but restaurants. However, driven by Relevant Retail, +$18B and Auto, +$2B, monthly sales were up $1.5B vs 2019.

The Spring Lift is usually over by July but the COVID crisis has pushed the timing back as monthly sales continue to beat 2019 into August. However, all but Relevant Retail continue to be down YTD vs 2019.

Now, let’s see how some Key Pet Relevant channels were doing in August.

  • Overall – Sales in 8 of 11 groups were down vs July, but 9 of 11 again showed increases vs same month in 2019.
  • Building Material Stores – This group has their biggest annual lift in Spring. This is unchanged and even stronger. While sales peaked in June, they’re still showing strong increases vs 2019. Although Sporting Goods stores are not included in this group, they have a similar Spring lift pattern. Their sales took off in May, peaked in June but continued to grow vs 2019. In June their YTD $ vs 2019 turned positive and by August they were up 9.9%.
  • Food & Drug – Despite dips in June & August, Supermarkets are maintaining incredibly strong growth vs 2019. Drug Stores $ slowed in August after strong growth in June and July but remain positive compared to 2019.
  • General Merchandise Stores – Sales in Clubs/SuperCtrs slowed in June but bounced back and are still strong vs 2019. Despite slowed sales in June>August, $ Stores are showing exceptional strength vs 2019. Discount Dept. store sales were generally slowing before the pandemic. This trend has continued despite a small Summer lift.
  • Office, Gift and Souvenir Stores – They were slow to re-open. Sales are growing, but this group was hit hard.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. Sales peaked in July, but the crisis has introduced many new consumers to online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. The others began reopening in May and the number grew in June which produced an increase vs 2019. Sales peaked in June but were still strong vs 2019 which pushed YTD sales up to +9.4%.

The recovery began in May and continued in June and July as even more businesses began to re-open. The Relevant Retail Segment turned positive in all measurements in May and stayed that way through July. In August, sales fell vs July but were still strong vs 2019. The key drivers in producing positive numbers vs 2019 were the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm.  How things are progressing? Here are the Advance numbers for September.

April and May were the 2 biggest spending drops in history. In June, monthly sales turned positive for the first time since February. In July the recovery continued. However, it flattened out in Aug/Sept leaving Total Retail still down -$37B YTD.

Total Retail – Total Retail spending fell -$15.5B vs August but was up +7.1% vs September 2019. In February 2020 sales were up $60B, +6.6% YTD versus 2019. Then came COVID-19. Hopefully, we hit bottom at -$112B in May. We began moving in the right direction but have stalled in September, still -$37B YTD and -$97B from February.

Restaurants – The Spending lift ended, down -$1.8B from August and -$8.6B vs September 2019. Things remain Topsy Turvy. August is usually their biggest $ month of the year. January and February, normally the 2 slowest months, are on top in 2020. In February YTD sales were up $9B. Then came the forced closures. Re-openings began in May but ran into problems in the Summer. Delivery/Pickup can’t make up the difference as spending is now down $115.5B YTD.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers, both new and used, began combating this attitude with some fantastic deals and a lot of advertising. Monthly $ turned positive versus 2019 in June and have maintained this pace through September. Although sales are down $14.5B YTD, they are up $34.4B vs 2019 in the last 4 months. Gas Station $ales increased in May, June and July over the previous month, but fell in August & September (-$61.9B YTD) People are still not driving as much, for commuting or road trips.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses began to shutter their doors in March but there was also a rash of binge/panic buying for “necessities” and a big lift in groceries as consumers focused on home cooking which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction. In June and July the $ growth continued but fell in August & September. However, the monthly June>September $ are larger than all months in 2019 but December. The primary drivers have been Nonstore, Grocery and SuperCenters/Clubs & $ Stores along with an enhanced spring lift from the Hardware/Farm and Sporting Goods channels. The Relevant Retail group now has posted positive numbers versus last year and year to date for 5 consecutive months and is up $154.9B YTD (+5.8%) vs 2019. In July it was up +4.9%.

Now let’s look at what is happening in the individual retail channels across America. In September, consumer spending in the relevant retail market grew even more positive versus 2019. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

In July, 11 of 13 channels beat last month’s $. In September it was down to only 3. In July, 10 channels beat July 2019. In August, this number was down to 7. By September, the number was back to 10. However, in YTD numbers, 8 are still showing an increase.  The YTD decreases are coming from channels that are primarily nonessential businesses.

After a full month of stay at home and widespread closures there was a surge in May. Things truly opened up in June and July and sales continued to increase. In August and September, they slowed slightly but YTD Relevant Retail Channels are up $154.9B vs 2019. The essential channels are responsible for the YTD lift vs 2019, primarily:

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm – A big Spring lift continues through the Summer as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow vs 2019. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Regular Department stores are reopening which has cut the losses for total Department Stores as Discount Department stores continue to slowly fade. Club/SuperCtr/$ stores provided the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. Since May we have seen consumer spending return to a more normal pattern in the big and small stores that promise value.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still driven by increased Food sales due to a slow restart by restaurants, up 10.5%, +$5.8B in September. Monthly Sales in the Health, Personal Care group are up vs 2019 since June. In August and September, the YTD $ turned positive. Drug Store $ growth was a key factor.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – After four consecutive months of growth, Sales Slowed in September. Home Furnishing is the best performer with a slight increase vs August and 3 consecutive monthly increases vs 2019. However, all 3 channels are down significant percentages in YTD sales. Clothing Stores are by far the worst performers. In September they were down 12.0% vs September 2019 and 32.6% YTD.

Building Material, Farm & Garden & Hardware – Sales peaked in the Spring. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. This has increased and extended their Spring lift to Summer. $ were up 23.4% vs September 2019 and up +$37.3B (+12.8%) YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers again sought outdoor recreation. Although September sales fell again from their June peak, they were up 18.3% vs September 2019. YTD sales were down $3.4B in April. In September, this deficit was wiped out as YTD $ were +$0.6B (+1.1%).

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales began to rebound in May and grew through July when they finally beat the monthly sales for 2019. In August and September sales were mixed. Back In February, this group was up $2.6B YTD. Through July,  they were down -$3.2B but moving in the right direction. After a Slow August they are again moving back on track, -$2.7B. However, they have a long road ahead.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. Despite falling -4.2% from the July $ peak, they are up 20.5%, +$114.3B YTD. Their increase is 74% of the total $ increase for Relevant Retail Channels. They are the clear leader, and their performance far exceeds their 12.9% annual increase in 2019. Since much of their annual increase comes from holiday sales, 2020 could be another great year for NonStore Retailers.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July. By September, all had decreased sales. The Auto segment is  showing positive monthly numbers vs 2019 but Restaurants and Gas Stations are still struggling. The Relevant Retail segment has been the only true positive. Although August/September sales were lower than July, monthly and YTD sales vs 2019 are up for 5 consecutive months. However, for many segments in this group there is still a long way to go. In July Total Retail was positive for the second consecutive month but it has turned down since then. We saw a resurgence of the virus and retail restrictions were reimposed in many areas, which contributed to sales declining from July. This is going to be a long battle with no end in sight. We will continue to monitor the data and provide you with regular updates.

 

 

 

 

Retail Channel Monthly $ Update – July Final & August Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

This means to get the full picture in our monthly channel update we need to look at the latest release of both reports. We will begin with the Final Retail Report from July and then move to the Advance Retail Report for August. This will also allow us to better track the consumers’ evolving spending behavior in terms of channel migration.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

We’ll start with the July Final report. The retail market hit bottom in April then began a slow recovery which continued in July. First, we will look at some major retail groups. (Note: The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $2.5B less than the Advance report projected a month ago. All were down slightly from projections. Relevant Retail: -$1B; Auto:-$0.6B less; Restaurants: -$0.3 less and Gas Stations’ $ were -$0.4B. $ales were up vs June across the board. Driven by Relevant Retail, +$30B and Auto, +$8B, Total monthly sales were also up $18.8B vs 2019.

The Spring Lift is usually over by July but the COVID crisis has pushed the Spring timing back. Things began to open up in May and continued into July. However, all but Relevant Retail were still down YTD vs 2019.

Now, let’s see how some Key Pet Relevant channels were doing in July.

  • Overall – Sales in 5 of 11 groups were down vs June, but 9 of 11 again showed increases vs same month in 2019.
  • Building Material Stores – This group has their biggest annual lift in Spring. This is unchanged and even stronger. While sales were down vs June, they still have spectacular increases vs 2019. Although Sporting Goods stores are not included in this group, they have a similar Spring lift pattern. Their sales took off in May and continued to grow spectacularly through June. Although July sales dipped slightly from June, they turned positive YTD in June.
  • Food & Drug – After a dip in June vs May Supermarket sales are back up with incredibly strong growth vs 2019. After 2 months of slowed $, Drug Stores came back strong in June and July and remain positive across the board.
  • General Merchandise Stores – Sales in Clubs/SuperCtrs slowed down in June but are back up in July and still strong vs 2019. Despite slowed sales in June & July, $ Stores are showing exceptional strength vs 2019. Discount Dept. store sales were generally slowing before the pandemic. This trend has continued despite a small July lift.
  • Office, Gift and Souvenir Stores – They were slow to re-open. Sales are growing, but this group was hit hard.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. Sales vs June were flat, but the crisis has introduced many new consumers to online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. The others began reopening in May and the number grew in June which produced an increase vs 2019. July was down slightly from June but was strong vs 2019 which pushed YTD sales up to +9.0%.

May began a slow recovery which continued in June and July as even more businesses began to re-open. The Relevant Retail Segment turned positive in all measurements in May and has stayed that way through July. Although many segments are now contributing, the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm are the key drivers. Let’s see how the situation is progressing. Here are the Advance numbers for August.

April and May were the 2 biggest spending drops in history. In June, monthly sales turned positive for the first time since February. In July the recovery continued. However, it flattened out in August leaving Total Retail still down -$74B YTD.

Total Retail – Total Retail spending increased $0.6B, +0.1% vs 2019, a big change from +3.9% in July and +3.4% in June. In February 2020 sales were up $60B, +6.6% YTD versus 2019. Then came COVID-19. Hopefully, we hit bottom at -$112B in May. We began moving in the right direction but have stalled in August, still -$74B YTD and -$134B from February.

Restaurants – The Spending increase slowed to +$2.1B over July and sales were down $11.6B vs 2019. This is important as August is usually their biggest $ month of the year. January and February, normally the 2 slowest months, are on top in 2020. In February YTD sales were up $9B. Then came the forced closures. Re-openings began in May but ran into problems in July and August. Delivery/Pickup can’t make up the difference as spending is now down $106.7B YTD.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers, both new and used, began combating this attitude with some fantastic deals and a lot of advertising. Sales turned positive versus 2019 in June, grew strongly in July, then slowed a bit in August. Although sales are down $28.6B YTD, they are up $20B vs 2019 in the last 3 months. Gas Station $ales increased in May, June and July over the previous month, but fell in August – Down $56.6B YTD. People are still not driving as much, whether for commuting or road trips.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses began to shutter their doors in March but there was also a rash of binge/panic buying for “necessities” and a big lift in groceries as consumers focused on home cooking which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction. In June and July the growth continued but it slowed in August. However, the monthly June>August $ are larger than all months in 2019 but December. The primary drivers have been Nonstore, Grocery and SuperCenters/Clubs & $ Stores along with an enhanced spring lift from the Hardware/Farm and Sporting Goods channels. The Relevant Retail group now has posted positive numbers versus last year and year to date for 4 consecutive months and is up $118B YTD (+4.9%) vs 2019. In July it was up +4.8%.

Now let’s look at what is happening in the individual retail channels across America. In August, consumer spending in the relevant retail market grew even more positive versus 2019. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

In July, 11 of 13 channels beat last month’s $. In August it was down to 7. In July, 10 channels beat July 2019. In August, this number was down to 7. However, in YTD numbers, 8 are now showing an increase as Health & Personal Care joined the group. The YTD decreases are coming from channels that are primarily nonessential businesses.

After a full month of stay at home and widespread closures there was a surge in May. Things truly opened up in June and July and sales continued to increase. In August they slowed slightly but YTD Relevant Retail Channels are up $117.9B vs 2019. The essential channels are responsible for the YTD lift vs 2019, primarily:

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm – A bigger than usual Spring lift continues as consumers focus “on their home”.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Regular Department stores are reopening which has cut the losses for total Department Stores as Discount Department stores continue to slowly fade. Club/SuperCtr/$ stores provided the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. Since May we have seen consumer spending return to a more normal pattern in the big and small stores that promise value.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still driven by increased Food sales due to a slow restart by restaurants, up 7.6%, +$4.5B in August. Sales in the Health, Personal Care group were up vs 2019 in June July and August and finally turned positive YTD. Drug Store sales growth was a key factor.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – In August, sales grew for the fourth consecutive month. Home Furnishing has even registered slight increases vs 2019 in July and August. However, all 3 channels are down double digit percentages in YTD sales. Clothing Stores are by far the worst performers. Even though August sales were up 7.4% over July they were still down 23.5% vs August 2019 and 34.9% YTD.

Building Material, Farm & Garden & Hardware – Sales fell again after peaking in June. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. This has accelerated and extended their Spring lift. Sales were up 11.9% vs August 2019 and up +$29.6B (+11.4%) YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers again sought outdoor recreation. Although sales fell again from their June peak, they were up 8% vs August 2019. YTD sales were down $3.4B in April. In August, this deficit had been cut to -$0.3B. If current trends continue, their YTD numbers could turn positive by September.

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales began to rebound in May and grew through July when they finally beat the monthly sales for 2019. In August sales dropped -2.9% vs July and -4.9% vs 2019. In February, this group was up $2.6B YTD. Through July,  they were down -$3.4B but moving in the right direction. That has stopped, at least temporarily as they are now down -$3.9B YTD. They have a long road ahead.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. In August, despite falling -4.2% from July, they are up 19.6%, +$97.2B YTD. Their increase is 82% of the total $ increase for Relevant Retail Channels. They are the clear leader and their performance far exceeds their 12.9% annual increase in 2019. Since much of their annual increase comes from holiday sales, 2020 looks to be another banner year for NonStore Retailers.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July. In August, only restaurants had an increase. The Auto segment is  showing positive monthly numbers vs 2019 but Restaurants and Gas Stations are still struggling. The Relevant Retail segment has been the only true positive. Although August sales are lower than July, monthly and YTD sales vs 2019 are up for 4 consecutive months. However, for many segments in this group there is still a long way to go. In July Total Retail was positive for the second consecutive month but it turned essentially flat in August. We saw a resurgence of the virus and retail restrictions were reimposed in many areas, which contributed to sales declining from July. This is going to be a long battle with no end in sight. We will continue to monitor the data and provide you with regular updates.

 

 

 

 

2019 Top 100 U.S. Retailers – Sales: $2.4 Trillion, Up 4.5%

The U.S. Retail market reached $6.22 Trillion in 2019 from all channels – Auto Dealers, Supermarkets, Restaurants, Online retailers and even Pet Stores. This year’s increase of $216B (+3.6%) was 23.4% below last year’s increase of $282B. This breaks a string of steadily growing increases which began in 2015. One factor is that fuel prices stabilized, and Gas station revenue flattened out. (Data courtesy of the Census Bureau’s monthly retail trade report.)

In this report we will focus on the top 100 Retailers in the U.S. Market. These companies are the retail elite and account for 39% of the total market. The vast majority also stock and sell a lot of Pet Products. The retail market is constantly evolving which produces some turmoil – mergers, acquisitions, closures. The Top 100 are not immune and you will see changes in ranking but for first time since I began tracking in 2013, the list is the same as last year. The report does contain a lot of data, but we’ll break it up into smaller pieces to make it more digestible. All of the base data on the Top 100 comes from Kantar Research and was published by the National Retail Federation (NRF).

We’ll begin with an overview:

  • The total Retail Market grew $216B in 2019 (+3.6%). In 2018 it was +4.9% and in 2017, +4.3%. Although sales are still increasing, the growth rate slowed markedly in 2019.
    • The Top 100 grew $105B (+4.5%). This is less than last year’s +4.8% but significantly better than the total market.
    • The Top 100 generates $2.4 Trillion in revenue, 39.0% of the total U.S. retail market – slightly more than 2018.
  • Let’s make the data a bit more relevant. If you remove the revenue from Auto, Restaurant and Gas Stations, the “targeted” retail market for the Pet Industry is $3.7 Trillion – 59.7% of the total market. By the way, the slight gain in share is due to the flattening of Gas Station revenue.
    • If we also remove Restaurant & Gas Station $ from the Top 100, the remaining $2.2T is 36.0% of the total market.
    • … and 60.3% of the $3.7 Trillion “target” market.

The Top 100 generally outperforms the overall market. In 2019 the difference in performance was significant. The lift was driven by the Top 100 targeted retail group, less restaurants and gas stations. Remember, the Top 100 is really a contest. In a “normal” year companies drop out and new ones are added. This can be the result of mergers, acquisitions or simply surging or slumping sales. In 2019 there were no changes. However, here are some significant changes in rank:

  • You see the growing strength of the internet.
    • Wayfair moved up 12 spots from #77 to #65
  • Sales for these 2 companies continued their downhill slide.
    • Sears from #60 to #75
    • GameStop from #75 to #97

Now let’s start “drilling down” into the specifics of the 2019 Top 100. Here’s a summary of Regular and Online Retailers versus the bundled total for Restaurants & Gas Stations.

  • Regular & Online Retailers have 58.4% of the stores but 92.3% of the business, up slightly from 92.1% last year.
  • 93.0% of the increase came from Regular/online retailers. However, they are only up 4.6% versus +5.2% in 2018.
  • Restaurant sales were up $6.7B (+4.0%) in 2019 and Gas Stations turned positive, +0.62B (+4.2%).
  • The overall Store count was up +0.6% versus +0.8% in 2018. The lift was driven by Gas Stations (+9.0% due to an acquisition) and Restaurants (+0.8%). Regular retailers were basically flat (+0.03%).

Now that we have an overview of the Top 100, let’s take a look at the “targeted” retailer segment. There are 82 total companies. How many are buying and selling Pet Products? This will reinforce how Pets have become an integral part of the American Household and how fierce that the competition for the Pet Parents’ $ has become.

  • Of 82 companies, 69 are selling some mixture of Pet Products in stores and/or online. (down from 70 in 2018)
    • Their Total Retail Sales of all products is $2.09 Trillion which is…
      • 93.4% of the total business for Regular & Online Retailers in the Top 100
      • 33.6% of the Entire $6.22T U.S. Retail market – from 69 Companies who sell Pet Products.
  • 58 Cos. (up from 56), with $1.99T sales sell pet products off the retail shelf in 145,607 stores – 2600 more than 2018.
    • As you can see by the growth in both sales and store count, in store is still the best way to sell pet.
  • Online only is another story and the story gets complicated.
    • Amazon includes Whole Foods, which has stores so the Amazon $ are in the “Pet in Store” numbers.
    • 2 traditional Retailers who only sold Pet Products online converted to in store. The others who only sell pet online are losing market share. However, internet only retailers, like Wayfair are showing strong growth

Pet products are an integral part of the strongest retailers and are widespread across the entire U.S. marketplace. Of the Top 100, 145,600 stores carry at least some pet items at retail. There are thousands of additional “pet” outlets including 20,000 Grocery Stores, 10,000 Pet Stores, 16,000 Vet Clinics, 5,000 Pet Services businesses and more. Pet Products are on the shelf in over 200,000 U.S. brick ‘n mortar stores… plus the internet.

Before we analyze the whole list in greater detail let’s take a quick look at the Top 10 retailers in the U.S.

  • They did $1.33 Trillion in Sales
    • 54.8% of Top 100 $ales
    • 21.4% of Total U.S. Retail $
  • No change in rank (The group is unchanged since 2015)
  • Sales are up for all. Amazon leads the way…again.
  • Store count is down 500, (-1.4%)

In the next section we will look at the detailed list of the top 100. We’ll sort it by retail channel with subtotals in key columns. We’ll then break it into smaller sections for comments.

I have not done a lot of highlighting however:

  • Pet Columns ’19 & ‘18 – a “1” with an orange highlight indicates that products are only sold online
  • Rank Columns – Change in rank from 2018: (Note: Acquisitions, Divestitures and Corporate Restructuring can cause big changes in ranking.)
    • Up 4-5 spots = Lt Blue; Up 6 or more = Green
    • Down 4-5 Spots = Yellow; Down 6 or more = Pink

Let’s get started. Remember online sales are included in the sales of all companies

Observations

  • After a number of acquisitions over several years, Drug is still in turmoil. Now we are seeing a growing number of closures of unproductive stores. However, sales growth remains strong.
  • The Traditional Department store segment continues its overall decline. Nordstrom stores were an exception with small gains in both sales and number of outlets for 2 straight years. Belk, a small chain, had the biggest $ales growth.
    • Sears sales and store count continue to plummet.
    • Saks sold Lord & Taylor in November 2019.
    • Although all carry a few pet items, often online, this channel has never fully embraced Pet Products.
  • Much of the growth in the Convenience Store Chains in the Top 100 in recent years has come through acquisitions. In 2019 there were no major acquisitions, but both major chains had small increases in $ales and stores.
  • Military Exchanges/Commissaries have added locations in recent years, which fueled the growth in sales. In 2017 they began reducing the number of Army/AF Exchanges. By 2019 this policy had spread to all military groups. 2019 sales were up in the Army/AF group which kept the overall drop in Military Exchg/Commissaries to -$0.06B (-0.5%).
  • Auto Parts Stores have become more stable in their growth. All chains increased their store count for the 2nd consecutive year. Overall, sales were up 5.5% in 2019 versus +2.5% in 2018.
  • Among Apparel retailers, the value outlets continue to show strong growth. All three of these chains carry pet products. The Gap sold Old Navy and no longer offers pet products. Ascena closed all Dress Barn stores (650).

Observations

  • Amazon continues to drive the evolution of U.S. Retail. Sales are up 267% in 5 years. With the acquisition of Whole Foods in 2017 they also have a small but growing brick ‘n mortar presence in the market.
    • Of the three Phone People, only Apple had a strong year.
    • QVC lost ground in 2019. Sales were down -5.2% and they fell 3 spots to #44 in the ranking.
    • In 2017 a move to online gaming began. GameStop sales continue to fall, and closures grow. They fell 22 spots.
  • Signet Jewelry’s sales were down -0.04%. This was bad but better than -3.4% in 2018 and -3.9% in 2017.
  • Mass Merchants have 2 of the 4 largest volume retailers in America – Wal-Mart and Costco. Recently, these two companies have driven the growth in this channel. In 2019 Costco was strongest, but all companies increased sales.
    • Wal-Mart had a 2.6% increase in sales which is below last year’s 3.4%. Their business is mixed as SuperCenters continue to grow and their online sales are taking off. However, “regular” Discount Department Stores are losing market share. These trends impact the overall business in both Wal-Mart and Target.
    • Target posted a third consecutive sales increase in 2019, after 3 years of flat or declining revenue.
    • Costco continues its strong growth (+9.3%), building new stores and increasing sales – both in store and online.
    • BJ’s sales were up for the second consecutive year after a string of annual declines from 2013 to 2017.
    • Meijer had small growth in sales and store count in 2019. However, since 2013 they rank third overall in the percentage of sales increase and first in the percentage of store count increase.
  • All Home Improvement/Hardware companies increased sales, but overall, the growth slowed a bit, from +4.3% to +3.4%. Store count turned positive but Lowe’s and True Value continued closures. Home Depot (#6) and Lowes (#9) led the way in sales growth, supplying $5.24B (76%) of the $6.88B lift in the category.
  • Like 2018 all Home Goods Companies but Bed Bath & Beyond increased sales. They also drove down store count. Sales were up 5.1%, again driven by Wayfair, who entered the top 100 in 2018 and now ranks #65, up 12 from last year.
  • Tractor Supply was up 5.9% which is much less than 2018, +11.4%, and below their average growth rate of +8.3% since 2013.

Observations

  • Supermarkets – $406B in Sales; 15 Companies; 15,000 stores; All Selling Pet Products. This is a very important group for the Pet Industry. With the highest frequency of consumer visits of any channel, the competition is fierce. The mergers and acquisitions have slowed. All companies but Southeastern showed increased sales. However, the strongest growth came from Sprouts (Natural) and Aldi (Value).
    • Southeastern Grocers filed for bankruptcy in 2018. Store closures and reduced sales continue.
  • Small Format Value Stores: Remember, this retail channel does more business than Traditional Department Stores.
    • As expected, Dollar General increased its lead over Dollar Tree in Sales, Sales Increase and Store Count.
    • Dollar Tree continues to increase sales, but its store count growth rate has slowed.
    • Big Lots had small growth in sales and stores after trending down in both areas in 2018.
    • This retail channel continues to grow in popularity. They are committed to Pet Products and their focus on value appeals to today’s ever more price conscious consumers. Plus, they are easy to shop.
  • Pet Stores – After the acquisition of Chewy in 2017, PetSmart’s sales registered a huge increase. In 2018, their sales were up +4.7%. In 2019, driven by the increasing popularity of the internet and Chewy, sales grew an impressive +14%. Petco qualified for the Top 100 for the first time in 2016. This was widely viewed as evidence of the strength of the U.S. Pet Industry. They hung on in 2017 but dropped out in 2018. It looks like they need a new formula, perhaps the internet, to make it back into the club.
  • Office Supply Stores – This channel continues its decline as Consumers are increasingly moving to online ordering.
  • Sporting Goods – Bass Pro (includes Cabela’s) continues to struggle but the other 3 companies eked out a small sales increase (2>3%) in 2019. Sales are up overall for the category but all companies, but Academy Sports are closing some underperforming stores.

Restaurants & Gas Stations and the Grand Total

Restaurant & Gas Station Observations

Although restaurants & gas stations aren’t relevant in terms of Pet Products Sales, they are relevant in our daily lives.

  • In 2019 although 4 companies had decreases, the overall sales for Restaurants in the Top 100 was up 4.0%%. This was better than the 3.6% increase in 2018 but less than the 4.6% increase in the total restaurant channel. McDonalds led the way in $, +$1.89B, but Chick-fil-A and Chipotle tied for the biggest percentage increase, +14.5%.
  • Falling gas prices in 2019 flattened the revenue growth of the total Gas Station Channel. The Top 100 Gas Station sales and stores are both up solely because Speedway acquired Andeavor Brands with their 3200+ outlets.

Wrapping it up!

The Top 100 became the Top 100 by producing big sales numbers and their performance, except for 2018, usually exceeds the overall market. In 2019 things returned to “normal”, +4.5% for the Top 100 vs +3.6% for Total Retail. The Top 100 Gas Stations, with a major acquisition, far exceeded the full market performance. However, top 100 restaurants underperformed to the overall Restaurant channel. If you just compare the “regular” retailers – both brick ‘n mortar and internet, then the Top 100 “won” big, +4.9% to +3.6% for the total “relevant” retail market.

Pet Products are an important part of the success of the Top 100. Sixty-nine companies on the list sell Pet Food and/or Supplies in 145,600 stores and/or online. Let’s take a closer look at the fifty-eight companies that stock pet products in their stores. This group generated $1.99T in total sales. How much was from pet? Let’s “Do the math”. If we take out the $11.9B done by PetSmart and the remaining companies generated only 1.5% of their sales from Pet, we’re looking at $29.7B in Pet Products sales from only 57 “non-pet” sources! (Note: The 1.5% share for Pet items is a low end estimate based on data from the U.S. Economic Census.) After a major adjustment, the APPA reported $56B in Pet Products sales for 2019. That means that 57 mass market retailers accounted for 53+% of all the Pet Products sold in the U.S. in 2019.

Pet Products are widespread in the retail marketplace but the $ are concentrated. Regardless of your position in the Pet Industry, monitoring the Top 100 group is important. This group also reflects the ongoing evolution in the retail market – the growing influence of the internet and the importance of Value. The group was relatively stable in 2019, with no changes from 2018. Competition is still intense, and the current COVID-19 crisis will likely cause turmoil in 2020.

 

 

 

 

 

 

 

 

 

Retail Channel Monthly $ Update – June Final & July Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

This means to get the full picture in our monthly channel update we need to look at the latest release of both reports. We will begin with the Final Retail Report from June and then move to the Advance Retail Report for July. This will also allow us to better track the consumers’ evolving spending behavior in terms of channel migration.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

We’ll start with the June Final report. The retail market hit bottom in April then began a slow recovery which continued in June. First, we will look at some major retail groups. (Note: The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $6B more than the Advance report projected a month ago. Relevant Retail and Restaurants were both $2.5B more than expected and the Auto segment was $1B better. Gas Stations’ $ were the same. $ales were up vs May across the board. Driven by Relevant Retail and Auto, Total monthly sales were also up vs 2019.

The Spring Lift is usually winding down in June but the COVID crisis has pushed the Spring timing back. Things began to open up in May and this continued in June. However, all but Relevant Retail were down YTD vs 2019.

Now, let’s see how some Key Pet Relevant channels were doing in June.

  • Overall – While sales in 6 of 11 groups were down vs May, 9 of 11 showed increases vs June 2019.
  • Building Material Stores – This group usually has their biggest annual lift in Spring. This is unchanged and even amplified. While Farm Stores sales were down vs May, they have spectacular increases vs 2019. Although Sporting Goods stores are not included in this group, they have a similar Spring lift pattern. Their sales took off in May and continued to grow spectacularly in June, turning positive for YTD vs 2019.
  • Food & Drug – Supermarket sales are down slightly from May but show strong growth vs 2019. After 2 months of slowed sales Drug Stores came back strong in June and are again positive across the board.
  • General Merchandise Stores – Sales in $ Stores and Clubs/SuperCtrs slowed down vs May but are still strong vs 2019. $ Stores are showing exceptional strength. Discount Department store sales were generally slowing before the pandemic. This trend has continued and accelerated slightly.
  • Office, Gift and Souvenir Stores – In May and June they began to slowly re-open, but this group was hit hard.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. This will likely continue as the crisis has introduced many new consumers to online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores. Pet Stores account for 22 to 24% of total sales. Pet Stores were usually deemed essential, but most stores were not. The others began reopening in May and the number grew in June which produced an increase vs 2019. Strong early year sales and this rebound pushed YTD sales up 7.9%.

May was the beginning of a slow recovery which continued in June as even more businesses began to re-open. The Relevant Retail Segment turned positive in all measurements in May and stayed that way in June. Although many segments are now contributing, the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm are the key drivers. Let’s see how the situation is progressing. Here are the Advance numbers for July.

April and May were the 2 biggest spending drops in history. In June, monthly sales turned positive for the first time since February as Total Retail was up $18B vs 2019. In July the recovery continued, +$20B but we’re still down -$74B YTD.

Total Retail – Total Retail spending increased $20.4B, +3.8% vs 2019, slightly more than the +3.4% in June. It’s hard to remember, but in February 2020 sales were up $60B, +6.6% YTD versus 2019. Then came COVID-19. Hopefully, we hit bottom at -$112B in May. We’re moving in the right direction but are still down -$74B YTD and -$134B from February.

Restaurants – Due to the reimplementation of closures in some areas, the Spending increase slowed to +$3.5B over June and sales were down $11.5B vs 2019. In February sales were up $9B. Then came the forced closures. Re-openings began in May but ran into problems in July.  Delivery/Pickup can’t make up the difference as spending is down $95B YTD.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers, both new and used, began combating this attitude with some fantastic deals and a lot of advertising. They started winning this battle in June as monthly sales turned positive versus 2019. Although sales are down $31B YTD, they are up $18B vs 2019 in the last 2 months. Gas Station sales increased in May, June and July over the previous month, but they are still down -$49B YTD. People are still not driving as much, whether for commuting or road trips.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses began to shutter their doors in March but there was also a rash of binge/panic buying for “necessities” and a big lift in groceries as consumers focused on home cooking which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction. In June and now July the growth continued. Although openings became more widespread in June and July the primary drivers have been Nonstore, Grocery and SuperCenters/Clubs & $ Stores along with an enhanced spring lift from the Hardware/Farm and Sporting Goods channels. As a result, the Relevant Retail group now has posted positive numbers versus last month, last year and year to date for 3 consecutive months and is up $100B YTD vs 2019.

Now let’s look at what is happening in the individual retail channels across America. In July, consumer spending in the relevant retail market grew even more positive versus 2019. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

The increases were widespread – 11 of 13 channels beat June $ and 10 of 13 channels beat July 2019. However, in YTD numbers, only 7 are showing an increase. The YTD decreases are coming from channels of nonessential businesses.

Observations

 After a full month of stay at home and widespread closures there was a surge in May. Things have truly opened up in June and July and sales continue to increase. However, the essential channels are responsible for the lift vs 2019.

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Sporting Gds/Hobby/Books – Stores re-opened and consumers began to return to outside recreational activities.
  • Bldg Materials/Garden/Farm – A bigger than usual Spring lift continues as consumers focus “on their home”.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Regular Department stores are reopening which has cut the losses for total Department Stores as Discount Department stores continue to slowly fade. Club/SuperCtr/$ stores provided the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. Since May we have seen consumer spending return to a more normal pattern in the big and small stores that promise value.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still driven by increased Food sales due to a slow restart by restaurants, up 12.3%, +$7.2B. Sales in the Health, Personal Care group are up vs June and vs July 2019 but remain down YTD. The situation is improving with more reopenings and Drug Store sales growing again.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – As reopening became even more widespread in July, sales grew for the third consecutive month. Home Furnishing even registered a slight increase vs July 2019. However, all 3 channels are down double digit percentages in YTD sales. Clothing Stores are by far the worst performers as sales were down 20% vs July 2019 and 36% YTD.

Building Material, Farm & Garden & Hardware – Sales fell slightly from June, -6.5%. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. This has accelerated and extended their Spring lift. Sales were up 16% vs July 2019 and up +25.5B (+11.3%) YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers again sought outdoor recreation. Although sales fell slightly from June, -3.9% they were up 19% vs July 2019. YTD sales were down $3.4B in April. In July this deficit had been cut to -$0.9B. If current trends continue through the summer, their YTD numbers could turn positive by September or maybe even August.

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales began to rebound in May and continued to grow through July when they finally beat the monthly sales for 2019. In February they were up $2.6B YTD. Through July,  they are down -$3.1B. They are moving in the right direction but still have a long road ahead.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. In July, they are up 19.8%, +$85.5B. Their increase is 85% of the total $ increase for all Relevant Retail Channels. They are the undisputed leader and their performance far exceeds their 12.9% annual increase in 2019. Since much of their annual increase comes from holiday sales, 2020 is on track to be a banner year for NonStore Retailers.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July. The Auto segment is showing positive monthly numbers vs 2019 but Restaurants and Gas Stations are still struggling. The Relevant Retail segment has provided the only true positive as sales are up in all measurements for 3 consecutive months. However, for many segments in this group there is still a long way to go. In July Total Retail was positive for the second consecutive month and Relevant Retail appeared to be moving towards a more routine pattern – a new normal. We have recently seen a resurgence of the virus and retail restrictions are being reimposed in many areas. The impact on retail in July was negligible but this is going to be a long battle with no end in sight. We will continue to monitor the data and provide you with regular updates as the situation evolves.

 

 

 

 

Retail Channel Monthly $ Update – May Final & June Advance

Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

This means to get the full picture in our monthly channel update we need to look at the latest release of both reports. We will begin with the Final Retail Report from May and then move to the Advance Retail Report for June. This will also allow us to better track the consumers’ evolving spending behavior in terms of channel migration.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

We’ll start with the May Final report. The Retail Market was beginning to recover after hitting bottom in April. First, we will look at some major retail groups. (Note: The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $2B more than the Advance report projected a month ago. Although Relevant Retail was $2B less than expected, the Auto segment was $3B better. Restaurants also were $1B more than the early numbers but Gas Stations’ $ were the same. $ales were up vs April across the board but down for all but the Relevant Retail group vs 2019 and YTD.

The Spring Lift usually begins in late March and peaks in May as consumers focus on the outdoors. Closures and “staying at home” pushed that back. Things began to open up in May, but except for Relevant Retail, $ were down vs 2019.

Now, let’s see how some Key Pet Relevant channels were doing in May.

  • Overall – Strong recovery from April as all channels, but Drug Stores had increases, 7 of 11 with double digit %.
  • Building Material Stores – This group typically has their biggest annual lift in Spring. This is unchanged and even amplified. Farm Stores are doing especially well with spectacular increases vs 2019. Although Sporting Goods stores are not included in this group, they have a similar Spring lift pattern. You can see that consumers really opened up to sports/recreation activities in May.
  • Food & Drug – Supermarket sales continue with strong growth. Drug Stores also had a March sales rush on essentials that ended in April and the decline continued into May as sales for both months were down vs 2019.
  • General Merchandise Stores – Sales in $ Stores and Clubs/SuperCtrs show continued strength with $ Stores showing the most growth. Some Discount Department stores were closed and shopping in others was often limited to essentials. You can see that they began to recover in May but are still down vs 2019.
  • Office, Gift and Souvenir Stores – Most of these stores were closed. In May they began to slowly open up.
  • Internet/Mail Order – “Stay at home” has further accelerated this channel’s growth. This will likely continue as the crisis has introduced many new consumers to online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores. Pet Stores account for 22 to 24% of this group’s total sales. Pet Stores were generally deemed essential, but most stores were not. The others began reopening in May so there was a big lift from April. They were up 21% through February which is why they still have 4.9% YTD increase.

After a disastrous April, May saw the beginning of a slow recovery. As businesses began to re-open the numbers started to move in the right direction. Driven by the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm the Relevant Retail Segment turned positive in all measurements. June brought even more widespread re-openings. Let’s see how the situation is progressing. Here are the Advance numbers for June.

April was the biggest spending drop in history. May was $97B better but still the second worst decrease in history, -$40B from 2019. In June, monthly sales turned positive for the first time since February as Total Retail was up $12B vs 2019.

Total Retail – Total Retail spending increased $12B, +2.3% vs 2019. It was the smallest increase since June 2019 but more importantly, the first since February. Sales through February 2020 were up $60B, +6.6% versus 2019. Then came COVID-19. Hopefully, we bottomed out at -$113B in May. We are still down -$100B YTD and -$170B from February.

Restaurants – Spending increased $6B over April but was still down $18B vs 2019. The year started out good, up $9B (+8.1%) through February. Then mandates forced many restaurants to close. Delivery and curbside pickup couldn’t make up the difference. Even the gradual re-opening in May and June was not enough as spending is now down $86B YTD.

Automobile & Gas Stations – If you can’t go out, except for necessities, then your car becomes less of a focus in your life. Buying a car was definitely less of a priority. Auto Dealers, both new and used, have been combating this with some fantastic deals and a lot of advertising. In June they turned the corner as sales were up $10B versus 2019. In terms of Gas Stations, May is traditionally the beginning of the vacation travel season but not in 2020. Although sales increased in May and June, they are still down -$42B YTD. People are still not driving as much, whether for commuting or road trips.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses began to shutter their doors in March but there was also a rash of binge/panic buying for “necessities” and a big lift in groceries as consumers focused on home cooking which drove spending up $19B. Then came April. With a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began a slow reopening so spending began to move in the right direction. Nonstore, Grocery and SuperCenters/Clubs & $ Stores continued their growth. The spring lift in the Hardware/Farm channel got even stronger and Sporting Goods stores got on  board. In June, these big drivers couldn’t quite match their May numbers, but the openings became more widespread and the Relevant Retail group now has posted positive numbers versus last month, last year and year to date for 2 consecutive months.

Now let’s look at what is happening in the individual retail channels across America. In June, consumer spending in the relevant retail market grew even more positive versus 2019. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

 

The increase over May was driven by re-openings. The increase vs 2019 and YTD came from essential businesses.

Observations

After a full month of stay at home and widespread closures there was surge in May. Things truly opened up in June which fueled an increase over May. However, the essential channels are responsible for the lift vs 2019.

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Sporting Gds/Hobby/Books – Stores re-opened and consumers began to return to outside recreational activities.
  • Bldg Materials/Garden/Farm – A bigger than usual Spring lift continues as consumers focus “on their home”.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April, but they came back strong in May and it continued in June. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Regular Department stores began reopening and Discount Department stores held their ground, so this cut the losses for Department Stores. Club/SuperCtr/$ stores provided the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. In May and now June we saw consumer spending return to a more normal pattern in the big and small stores that promise value.

Food and Beverage, plus Health & Personal Care Stores – The Grocery segment is still driven by increased Food sales due to a slow restart by restaurants, up 10.5%, +$6B. Sales in the Health, Personal Care group are up slightly from May but remain down overall. Many Personal Care stores are now slowly reopening but Drug Stores sales are essentially flat.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – More and stores are reopening, producing a spectacular increase in sales over May. However, June $ were still down from 2019. They all had the same pattern, with Clothing Stores being the most extreme. Their sales were up 84% from May but still down 24% vs 2019 and 39% YTD. These channels have a long way to go to recover.

Building Material, Farm & Garden & Hardware – This channel has its biggest spending lift in the Spring. The shelter in place rules caused many consumers to turn their focus to their needs at home, including house and yard repair and improvement. This has accelerated and extended their Spring lift. Sales are up across the board, including +9.9% YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores which had been closed are now open. Sporting Goods stores had generally been open but organized sports were on hold, parks closed, and non-essential travel was discouraged. In May things began to open up and this expanded in June. Consumers again sought outdoor recreation. Sales doubled from April to May and grew 31% in June. June $ even beat 2019 by 22%, but YTD they are still down 6%.

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. While Pet Stores are essential, most other stores in this group are not. The closures hit this group particularly hard. May sales were up 27% from April as the reopening began and grew 12% in June. However, they were still down 5% vs June 2019 and are down 7% YTD. In February they were up $2.6B, +14.1% YTD. Now they are down -$4.7B – a big turnaround.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. Compared to 2019, NonStore was up 16.3% in March, 22.5% in April, 25.3% in May and 30.3% in June. Since April they have been the leader in all sales measurements either in $ or % increase. As you can see, their lead is growing. Also, their YTD sales are up 18.4%, exceeding their 12.9% annual increase in 2019. This early year lift bodes well for 2020 as much of their annual increase is usually driven by Christmas.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – After a record drop in spending in April, the situation improved slightly in May, but it still was the 2nd biggest year over year monthly retail sales decline in history. Restaurants, Auto and Gas Stations all had big sales increases in May and now June, but they are still struggling. The Relevant Retail segment has provided the only true positive as sales are up in all measurements for 2 consecutive months. However, for many segments in this group there is still a long way to go. In June Total Retail turned positive for the first time since February and Relevant Retail appeared to be moving towards a more routine pattern – a new normal. However, we are now seeing a resurgence of the virus and retail restrictions are being re-implemented in many areas and are likely to become more widespread. This is going to be a long battle with no end in sight. We will continue to monitor the data and provide you with regular updates as the situation evolves.

 

 

The Impact of COVID-19 on Small Businesses – 6/27 Update

Small Businesses are at the core of our nation’s economy and the challenges they face are important to everyone. To better understand the impact of COVID -19 on these businesses and aid decision makers in serving their urgent needs, the U.S. Census Bureau directly reached out to small businesses. For the Survey, the Census Bureau defined a small business as a single location business with employment between 1 and 499 and receipts of at least $1,000.

Consisting of 16 questions, this 5-minute survey reached close to 1 million businesses split across a 9-week rotation to reduce burden and lessen survey fatigue. The survey included small businesses in every area of the U.S. Economy. This initial survey began in the week ending 5/2/20 and was completed in the week ending 6/27/20 so we are able to track the evolution of the COVID-19 impact over 8 full weeks.

The results are first categorized by major, 2 digit NAICS code classification. Slightly more specific data (by 3 digit NAICS code) also became available so that we are able to more closely track elements which are relevant to the Pet Industry. Here are the 14 “pet relevant” groups for which we have compiled data:

  • National Avg: Covers All Major Areas with a few Exceptions like Agricultural Production and Religious Organizations
  • Product Related Groups:
    • 31-33: Manufacturers – All manufacturers
      • 311 – Food Manufacturers (Both Human & Animal)
    • 42: Wholesalers/Distributors – Wholesalers/Distributors of any type products
      • 424 – Distributors of Nondurable Goods (Includes food and nondurable supplies)
    • 44-45: Retail Trade – This includes everything from gas stations to Pet Stores (#453910). No restaurants
      • 444 – Building Materials/Hardware/Farm
      • 445 – Food & Beverage Stores
      • 452 – General Merchandise Stores
      • 453 – Miscellaneous Retailers (includes Pet Stores)
      • 454 – Nonstore Retailers
  • Services Related Groups:
    • 54: Professional, Scientific and Technical Services – Legal, Advertising Agencies, etc… and Vet Clinics (#541940)
    • 81: Other Services – Funeral Homes, Barber Shops, Auto Repair, etc … and Pet Care Services (#812910)
      • 812 – Laundry & Personal Care (includes Pet Care Services)

The data from each group has been bundled into 3 charts showing the group’s responses to 8 particularly relevant questions about the impact of COVID-19.

Here are the charts and the questions that will be answered on each:

Chart #1: Impact of Covid-19 on Your Business

  1. Overall, how has this business been affected by the COVID-19 pandemic?

Chart #2: Key Business Elements – Weekly Changes

  1. In the last week, did this business have a change in operating revenues?
  2. In the last week, did this business have disruptions in its supply chain?
  3. In the last week, did this business temporarily close any of its locations for at least one day?
  4. In the last week, did this business have a change in the number of paid employees?

Chart #3: Government Assistance & Your Outlook For The Future

  1. Since 3/13, has this business requested/received financial assistance from Paycheck Protection Program (PPP)?
  2. Since 3/13, has this business received any financial assistance from any Federal Program?
  3. In your opinion, how much time will pass before this business returns to its usual level of operations?

We are not going to review each group in this report. We will take a closer look at the Overall Retail Trade (NAICS 44-45) and 3 retail subchannels – Miscellaneous Retailers (includes Pet Stores), Nonstore Retailers and Hardware/Farm Stores. We also will review Personal Care Services which includes Pet Care. At the conclusion of the report we will make the data for all 14 groups available for you to download. You can then pick the ones that are most relevant to your particular business.

A word of caution: Remember, this data is only for the small businesses in any particular classification. It doesn’t include the big chains, which could be impacted differently because of their size, capabilities or resources.

Let’s get started with the Retail Trade

  • There is a big negative impact on the retail trade,76.0%. However, it is still faring better than the overall market which stands at 82.7% negative as of 6/27.
  • The negativity has moderated but the readings for all response groups have basically plateaued since 6/13.

  • Every measurement on this chart began moving in the right direction but most have plateaued since 6/13. In terms of revenue, 40% still showed a decrease which is still better than the national average, 42.6%. Retail outlets are also doing better than the Nation overall at generating increased $ – 29.1% to 19.7%.
  • Supply chain problems are high but stable. Much of the country was opened up in June so temporary closures only affected 15.3% of businesses – a big drop from 43.7% eight weeks earlier.
  • The employment situation has improved, especially in terms of businesses decreasing the number of employees. However, that situation has also become static, with the same number adding as cutting and 80% maintaining the status quo.

  • 97% of retail trade businesses that applied for PPP funds have received payment. In fact, 79% of all small retail businesses have received some form of government assistance.
  • In terms of outlook, although the number of businesses now expecting little or no effect by COVID-19 has grown significantly from 5.1% to 13.3%, this is a small segment. The most popular forecast (40.8%) is over 6 months for a return to normal. When you combine that with the 10.3% who believe that things will never be normal again you get over half, 51.3% who think that recovery will take considerable time. However. This is better than the overall national average of 53.6%

Now let’s drill a little deeper – Miscellaneous Stores, which includes Pet Stores

  • While Pet Stores were generally deemed “essential”, most stores in this group, like gift shops, art dealers and used furniture stores were not, which explains the high initial negative impact. It did moderate slightly in May but turned sour in mid-June.
  • After peaking at 16.7% on 6/6, the number of businesses reporting a positive or little no effect on their business fell to 13.2% by 6/27.

  • The change in revenue started in the right direction but has basically plateaued. Although businesses reporting decreased revenue have actually increased since 6/13.
  • Supply chain problems remain a big factor and they too have gotten worse since 6/13.
  • Closures have been cut in half but still affect almost 1/3 of the group (31.8%)
  • The employment situation has gotten significantly better but there are still twice as many businesses losing employees (14.9%) as those adding employees (7.4%).

  • The PPP funds have been distributed. 96% of businesses who applied have received funds. In fact, 81.5% of this group have received some form of federal aid.
  • This group’s projected recovery time has gotten worse since mid-June. Now 49.1% say that it will be over 6 months until a return to normal and 14.6% say normal will never return. That is 63.7% of these businesses.

Next, let’s look at Nonstore Retailers

  • Although the negative view is less than at the beginning, it is trending up. However, so is the positive view, The biggest decrease occurred in little/no effect which fell from 14.2% to 8.7% in the week of 6/27.

  • The revenue situation improved in May but has plateaued in June. 22-24% are posting increases. 35-37% report no change and about 40% are seeing decreased revenue.
  • Supply chain problems increased in mid-June but improved by 6/27, Closures improved in June but were up and down on a weekly basis.
  • The employment situation generally became more stable in June as hiring and layoffs both slowed. Although there was a little more turmoil in the week of  6/27.

  • 98% of businesses that requested PPP have received funds and 72% of the businesses in this group have received some form of government assistance.
  • Their overall projection for recovery grew worse in June. By 6/27 43.3% said it would take over 6 months and 9.7% said normal would never return. That’s 53% which is about equal to the National Average (53.6%) but worse than Total Retail (51.3%), which is somewhat surprising for a nonstore group.

Our final Retail Trade group is Hardware/Farm Stores

  • Except for an uptick in negativity during the week ending 6/6, their impression of the impact of COVID-19 on their business has steadily improved. By 6/27 their negativity score (55.6%) was the lowest of any retail group that we measured, including Food & Beverage Stores at 59.4%.

  • Their revenue began moving in the right direction and by 6/13 the number with increases exceeded the number with decreases. It has become relatively stable – about 33% up, 30% down and 37% with no change.
  • Supply chain problems are stable, but high at 56+%. Closures are down dramatically and were only 6.7% as of 6/27.
  • Hiring has slowed, after peaking during the week of 6/6 but still exceeds layoffs. 81.4% are now showing no change in the number of employees.

  • 99% of businesses that have applied for PPP have received their money and 75.4% of the group has received some form of federal assistance.
  • This group projects a speedier recovery than any other retail group. 38.3% expect a return to normal in 6 months or less but 26.6% say that there has been little or no effect on their business. That totals 64.9% which is much better than the National Average of 46.4% and 48.9% for Total Retail.

Finally, let’s look at the Personal Care Services Channel, which includes Pet Care Services

  • This segment was hugely impacted by closures but even opening up has not much improved their assessment of the situation. The negativity is still extraordinarily high at 91.5%. Although it has moderated slightly, almost 2/3 of the businesses, 65.2% still see the situation as extremely negative.

  • The revenue situation has gradually improved but 50.6% of businesses are still reporting a decrease in $ as of 6/27.
  • Supply chain disruptions are improving and are lower than many other channels. Closures have decreased by 54% since May 2nd but still affect 3 in 10 businesses (30.8%).
  • The employment situation is still negative – 7.8% hiring; 19.5% laying off, but it has reached its highest level of stability as 72.7% maintained the status quo in the week of 6/27.

  • 94% of businesses that applied for PPP have received funds and 84.4% of the group has received some form of federal assistance, which is better than the National Average, 77.0% and the Total Retail Trade, 78.7%.
  • Their outlook is rather bleak and almost the exact opposite of Hardware/Farm stores. 47.9% project over 6 months for a return to normal while 19.0% say normal will never return. That totals 66.9%, two thirds of all personal care outlets.

As you can see from our examples, the specifics can vary widely by business category. As the economy began re-opening the situation was generally improving. However, we have seen a resurgence in the virus. This is leading to reimplementation of some business restrictions and has produced an overall feeling of uncertainty among consumers. Until we have a stability in health, a return to normalcy in business will be greatly slowed. COVID-19 has had an especially negative impact on U.S. Small Businesses. Even small businesses in channels that are showing overall growth during the crisis, like Hardware/Farm and Nonstore, are having serious problems. The overall national growth in these channels is being driven by the “big guys”, like Home Depot and Amazon. The overall projection for a return to normal for small businesses is increasingly over 6 months, which would put it in 2021.

That concludes our analysis of this initial survey. As you can see the situation is far from over. Hopefully the Census bureau will conduct periodic future surveys so that we can fully monitor the progress of small businesses through this crisis.

Finally, as we said, more data is available for you. Files with the specific data/charts for all 14 business categories that we identified as relevant to the Pet Industry (including those used in this report) are available for download. Each file is a 1 page word document with 3 COVID-19 impact charts for a specific business category. There is no commentary – just data. Pick the ones that are most relevant for your business and share them with your associates. STAY SAFE!

National Average & Major Business Categories

More Defined Supply Chain Categories

Drilling Down into the Retail Trade

Finally, Personal Care Services (includes Pet Care)