Buoyed by solid economic momentum, March retail sales see solid growth, reports Commerce and NRF

United States retail sales, for the month of March, were strong, according to data issued today by the United States Department of Commerce’s U.S. Census Bureau and the National Retail Federation (NRF).

Commerce reported that March retail sales—at $619.1 billion—were up 9.8% compared to February, which was off 2.7% compared to January and up 6.7% annually, and was impacted by harsh winter weather conditions, following a 3.0% decline from January to February, while rising 27.7% annually, with that comparison somewhat tilted, as March 2020 represented the outset of the COVID-19 pandemic. And it also observed that total retail sales, from January 2020 through March, saw a 14.3% annual increase compared to the same period a year ago.

March retail trade sales were up 9.4% compared to February and up 26.9% annually. Non-store retail sales—which includes e-commerce activity—continued its strong run, with a 28.7% annual gain, while food services and drinking places rose 36.0% annually, as more people receive COVID-19 vaccination shots.

NRF data: The NRF reported that March retail sales saw a rebound, driven, in large part, to government stimulus checks and increased vaccination numbers.

The organization reported that its calculation of March retail sales, which excludes automobile dealers, gasoline stations, and restaurants, pointed to a 7.4% seasonally-adjusted increase, from February, and a 17.7% unadjusted annual gain, which were up, respectively, compared to February’s 3.4% sequential decrease and 7.2% annual gain. On a three-month moving average, through March, NRF reported that retail sales rose 12.7% annually on an unadjusted basis.

Some of the key retail sales sector data for March cited by the NRF included:

• Online and other non-store sales were up 6% month-over-month seasonally adjusted and up 30.7% unadjusted year-over-year;
• Sporting goods stores were up 23.5% month-over-month seasonally adjusted and up 78.2% unadjusted year-over-year;
• Building materials and garden supply stores were up 12.1% month-over-month seasonally adjusted and up 32.4% unadjusted year-over-year;
• Grocery and beverage stores were up 0.7% month-over-month seasonally adjusted and down 10.2% unadjusted year-over-year; and
• Furniture and home furnishings stores were up 5.9% month-over-month seasonally adjusted and up 49.6% unadjusted year-over-year

“Today’s data confirms reports that people are going out and spending and that in-store traffic has picked up,” NRF Chief Economist Jack Kleinhenz said in a statement. “After a disappointing February, there was a perfect alignment of factors supporting a surge in shopping in March. Further reopening of the economy was encouraged by economic stimulus payments, the public health situation improved with more vaccinations, employment grew and there was seasonal activity around Passover, Easter and spring break. Even with some stimulus money going to savings, consumers’ finances are healthy, and they are willing to spend. Retail sales supported by rigorous fiscal and monetary policy continue to be a bright spot in the economy and have provided momentum during this awful pandemic.”

The comments made by Kleinhenz match up well with the NRF’s recent 2021 retail sales forecast, which is calling for an annual increase between 6.5% and 8.2%, for a total between $4.33 trillion and $4.40 trillion. Looking back at 2020, NRF observed that total retail sales, for the year, headed up 6.6%, amid the myriad challenges presented by the pandemic, while topping the previous annual percentage gain, of 6.3%, from 2004.

NRF said that these figures come with the prospects of economic improvement spurred on by more people receiving COVID-19 vaccinations, coupled with the continuing re-opening of the economy. 

In late February, NRF President and CEO Matthew Shay said that NRF is optimistic that healthy consumer fundamentals, pent-up demand, and widespread vaccine distribution will collectively contribute to generate increased economic growth in 2021.

And he noted that the NRF and its members have had a number of conversations with White House representatives that are leading the COVID-19 task force offering NRF members expertise, with a focus on logistics, distribution, and demand forecasting, which he described as very productive and will continue.

“Those conversations will continue, and you will see them continue in a visible over the coming weeks and months,” said Shay. “Despite the challenges of the last year, we continue to be optimistic that in the aggregate overall macroeconomic conditions are very healthy and will continue to improve as we seen those numbers and lines go in different directions and see increasing numbers of vaccines distributed and administered and we see decreases in infection rates and containing the Coronavirus and diminishing the daily infection rate and keeping people safe and healthy.”  

Shay also observed that the NRF’s forecast is largely based on solid economic fundamentals and consumer strength, in addition to the vaccines. What’s more, he said that NRF is optimistic that the economy will experience its fastest growth in more than two decades, adding that the NRF’s forecast is a snapshot based on the current economic environment, with some uncertainty in various areas but overall NRF maintains the trajectory of the economy is very solid, with the expectation of robust growth, as the vaccine continues to be distributed over the course of the next year.

Naveen Jaggi, President Retail Advisory Services, JLL, observed in a research note that the steep contrast between March 2020 and March 2021 showed an explosion in sales and provides concrete evidence that the retail sector is well on its way to recovery.

“February’s severe winter weather kept many consumers at home, causing retail sales to fall across many categories,” Jaggi explained. “But March’s spring weather brought extra bright spots with further vaccine rollout and more stimulus checks hitting bank accounts, leading to a major surge in sales across all retail sales categories. With an additional 916,000 jobs added last month, more money is streaming into the economy. And as consumer confidence and demand continues to grow, we expect the sector to continue its strong rebound as we emerge from the pandemic.”