Spending letup persists—adjusting for an early Easter

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Adjusting for the impact of an early Easter this year, consumers’ retail spending through March remains slower than the strong November-December holiday period.

The slowdown is in retail sales excluding autos, fuel, and restaurant. Taking a toll on sales are higher fuel prices and stronger spending on autos in March.

Also a factor—besides late winter storms—is mixed consumer confidence (more here), which weighs on some categories while remaining supportive of homegoods categories and channels.

Here is more on what the latest government-reported retail numbers say—as backed up by the accompanying charts:

  • March signs. The data adjusted for the early Easter and other seasonal effects show that retail sales (less autos, fuel, and restaurants) grew 3.9% year-to-year in March. That’s near January-February growth rates and well below the 5.5% seasonally adjusted holiday pace. Without the seasonal adjustment, there is no clear sign of a letup.
  • Ecommerce vs in store. Seasonally adjusted in-store sales slowed to about 2.3% growth in March, based on ecommerce gains estimated about 15% growth. The in-store gains have slowed from a November peak of 4.0% to 4.5% growth—which had contributed to the best brick-and-mortar holiday since 2014.
  • Trends by store type. The homegoods and ecommerce/nonstore channels are where the strongest month-to-month and year-to-year gains were found in March. Home improvement stores registered a month-to-month decline—likely weather-related—but remain one of the strongest growing channels. Clothing, sporting goods, and other specialists remain among the weakest growing channels.
  • Annual trend. Despite the strong finish to 2017, retail performance for the year was modest at best. Unadjusted sales excluding autos, fuel, and restaurants, grew at the same 3.7% in 2017 as 2016. Adjusted sales improved from 3.5% to 4.1% growth. In either case, ecommerce sales remained the primary source of growth (+16%) while in-store sales grew more weakly (between 2.1% and 2.6%).

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