Worse Than a Decade of Stagnation – Retail Sales Are Held Up By Only Two Sectors. The Rest Are Sinking.

Worse Than a Decade of Stagnation – Retail Sales Are Held Up By Only Two Sectors. The Rest Are Sinking.

Wolf Richter wolfstreet.com, www.amazon.com/author/wolfrichter

There are two components of “retail and food services sales” that have been booming over the past few years through the fourth quarter 2016. And then there’s all the rest combined – 71% of total retail sales – that has been in decline since the third quarter of 2008. That’s the tough reality of retail sales in the US.

First the good news: e-commerce sales

In the fourth quarter, e-commerce sales soared 14.3% from a year earlier, to $123.6 billion, not adjusted for seasonality and price changes, according to the Commerce Department today. E-commerce sales for the entire year 2016 jumped 15.1% year-over-year to $394.9 billion, accounting for 8.1% of total retail and food services sales, up from 7.3% in 2015. You see where this is going.

E-commerce sales include online sales by retailers with brick-and-mortar stores, such as Walmart and Macy’s that are all trying to carve out a presence on the internet, with varying success.

This chart uses seasonally adjusted e-commerce sales to eliminate the very large seasonal fluctuations, including the spike every Q4 and plunge every Q1, but it’s not adjusted for inflation:

While e-commerce soared 14.3% year-over-year in Q4, total retail and food services sales, including e-commerce, rose only 3.9%. In all of 2016, total retail sales edged up only 2.9% from 2015. So what is left over once e-commerce is removed from the equation?

 

Retail and food services sales without e-commerce

Total retail and food services sales without e-commerce in Q4 2016 edged up to $364 billion, only 6.8% above the peak before the financial crisis in Q4 2007 ($340 billion):

And the second booming sector: auto sales

Auto sales have been booming since the end of the Financial Crisis. The number of new vehicles sold set a new all-time record in 2015 and squeaked past it in 2016 with a record of 17.9 million vehicles. The record prior to 2015 and 2016 had been set at 17.8 million vehicles in the year 2000! So it was a recovery from the Financial Crisis, but in terms of new-vehicle unit sales it’s nothing to write home about…..more here

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