Advance Retail Sales Winners and Losers Detail
What’s Cookin?
Clearly nonstore retailers led of course by Amazon.
Not Close to the Stove
Department Stores and clothing are abysmal. I suspect people are buying clothes, but increasingly online.
Department stores are closer to the graveyard than the stove.
Gasoline Sales
Given the massive jump in the price of gas, one might have thought that gasoline sales would be doing better than they are.
Attribute most of this to work-at-home policies that are here to stay, at least compared pre-pandemic levels.
Also cars are getting more fuel efficient and due to Covid-19 many people are still traveling much less.
Food and Drinking Establishments
It’s important to note that despite a recent surge in spending, sales at bars and restaurants have still not recovered to pre-pandemic levels.
I do not have a breakdown of fast food carry outs, but places like McDonald’s, Wendy’s, Arby’s, etc have likely more than fully recovered with indoor dining still suffering.
Nonstore Retail Sales as Percentage of Advance Retail Sales
The above chart is a comparison of online sales to sales that reasonably can be purchased online.
I exclude food service, gasoline, grocery stores, and motor vehicles.
One can buy all motor vehicles online, and increasingly that will happen, but for now, that is not the way the vast majority of people shop. And even if they do, the sale is attributed to a dealer.
Pre-Covid-19, this breakdown was about 27%, generally steady, slowly rising, or perhaps even slowing falling depending on how one interprets the chart.
In the initial stages of the pandemic nonstore sales spiked to over 35%. The calculation has been generally steady for a year now at around 30%.
The pandemic boosted online sales and I highly doubt we return to the previous trend.
Overall Sales
I commented on the whopping 9.8% increase in overall sales in my previous report.
Please see Retail Sales Surge Nearly 10% In March as the Covid-19 Recovery Strengthens for details and discussion.
Two Key Ideas
If you hand out free money, especially to those who are working and suffered no job loss, people will find a way to spend it. Then what?
This surge in online sales and work at home is a big disinflationary if not deflationary force.
For further discussion of disinflationary trends please see comments from Lacy Hunt in my discussion Expect Inflation to Accelerate? Here’s 8 Reasons to Expect Decelerating Inflation.
Mish
Lumber prices has been inflated for months. I held off on building a shed last summer because plywood was $50/sheet when it normally costs about $30.
This is all transitory. By years end, after enough states stop this covid insanity, things will return to normal.
My girlfriend sells things on Etsy. Up until the last two weeks, things were going gangbusters for 8 months. Then sales plummeted 60 to 75%.
My brother is in the auto industry. The two macro themes he told me were: buying a car online costs $600 more than going to a dealer AND there is a major supply chain disruption. Taiwan is experiencing a drought, so water has been curbed for semiconductor fabs.
Here’s something really hot that I ordered on Amazon a couple days ago:
https://www.amazon.com/gp/product/B07S9T8QNH/ref=ppx_yo_dt_b_asin_title_o01_s00?ie=UTF8&psc=1
You are right! There are more jobs! more money! more income! and the fewer deaths due to Covid 19.