October retail sales see strong gains, according to Dept. of Commerce and NRF

Buoyed by consumers focused on holiday shopping, United States October retail sales saw gains, according to data respectively issued today by the Department of Commerce and the National Retail Federation (NRF).

Commerce reported that October retail sales came in at $638.2 billion, marking a 1.7% increase over September’s revised $627.5 billion and a 16.3% annual gain. And it added that total retail sales, from August through October, rose 15.4%.

Retail trade sales saw a 14.8% annual gain, and food and drinking places sales were up 29.3%, noted Commerce.

NRF reported that based on its calculation of retail sales, which excludes automobile dealers, gasoline stations, and restaurants to focus on what it calls “core retail,” pointed to a 1.7% seasonally-adjusted increase, from September to October, and a 10.8% annual increase on an unadjusted basis. These tallies were in line with September’s sequential 0.4% and 10.9% annual gains, NRF said, adding that its data showed an 11.3% unadjusted annual gain on a three-month moving average.

“October’s numbers highlight the retail industry’s ongoing hardiness now that we’re in the fourth quarter,” NRF Chief Economist Jack Kleinhenz said in a statement. “Consumers remain in high gear moving into the last months of the year. While it’s difficult to parse out exact amounts, the figures reflect the combined effects of Halloween and early holiday shopping. Even though consumers may have begun shopping early to avoid inventory shortages, November and December are still when they do most of their holiday shopping, so much remains ahead of us. Concerns about high prices are weighing on consumer sentiment, but that has not held back spending. As it has for more than a year-and-a-half, COVID-19 remains a significant factor should there be an increase in coronavirus infections that could cause a pullback in spending.”

NRF reported that October retail sales saw gains in all but two categories it tracks, with clothing and clothing accessories (up 22.7% annually), electronics and appliance stores (up 17.4% annually), and sporting goods stores (up 16.5% annually) leading the way.

Earlier this year, NRF reported that that a record year could be on tap for 2021 holiday retail sales (NRF defines holiday sales as sales from November 1-December 31, excluding automobile dealers, gasoline stations, and restaurants), projecting an increase between 8.5%-to-10.5%, coming in between $843.4 billion and $859 billion.

Should this estimate come to fruition, it would top the previous record of $777.3 billion in 2020, which marked an 8.2% annual gain, as well as nearly doubling an average increase of 4.4% over the past five years, too.

NRF President and CEO Matt Shay explained in October on a media conference call that 2021 has been another historical year, for the retail industry, in terms of the transformation and changes brought about by the pandemic, as the sector continues to work through changing behaviors by consumers, and also changes brought about by the pandemic, external issues related to the supply chain, inflation, and others.

“Overall, 2021 has been a much better year than 2020 for many reasons,” said Shay. “There has been a lot more certainty in the way we handled the pandemic, and we have seen great progress on that front. Retailers have benefitted substantially from the incredible fiscal and monetary stimulus that has been provided by the federal government over the course of the last 20 months. That…has created an environment in which household fundamentals have been very strong. Consumers are in a favorable position as we head into the last two months of the year. We see income wages continue to rise, savings rates at an all-time high, and household balance sheets never stronger.”

Through the first 10 months of 2021, NRF said that total retail sales (based on its calculation of retail sales) are up 14.1% compared to the same period in 2021, which it said is in line with its full-year forecast of an increase between 10.5%-to-13.5%, to between $4.44 trillion and $4.56 trillion.