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MNI DATA IMPACT:US Oct Retail Sales Rise 0.3%; Slowest in 1 Yr

MNI (Washington)
WASHINGTON (MNI)

The pace of U.S. retail sales slowed markedly in October, rising by a weaker-than-expected 0.3%, marking the smallest monthly increase since October 2019, according to figures published Tuesday by the Census Bureau.

Financial markets had expected sales to grow by 0.6%, and September sales were also downwardly revised to a 1.6% increase from the much stronger-than-expected 1.9% gain that was reported last month. Still, headline retail sales are up 5.7% from a year earlier.

Motor vehicle sales rose 0.4% in October, slowing from a 2.9% increase in September. From a year earlier, vehicle sales were up 10.7%. Excluding vehicle sales, retail sales rose 0.2%.

Gas station sales rose modestly in October, up 0.4% following a 2.0% increase in September. Gasoline sales are still down 14% from year-ago levels. Excluding gas station sales, retail sales were up 0.2% in August. Excluding motor vehicle and gas station sales, total sales rose 0.2%.

Restaurant spending fell 0.1%, the first decline since April and a sign that the newest surge in cases is weighing on the recovery.

STORE CLOSURES

Sales growth through the month was mostly concentrated in sales at nonstore retailers, including online marketplaces, which were up 3.1% in October and a whopping 29.1% from a year earlier. U.S. consumers are leaning more heavily on online shopping as renewed Covid fears and business restrictions keep them at home, but e-commerce makes up only a fraction of the market, and won't be enough to buoy sales through the winter if physical stores close.

Roughly 52% of consumers surveyed by the Conference Board in October said they planned to make at least half of their holiday purchases online this year versus 42% in 2019.

Electronics and appliance store sales were also strong in October, growing 1.2% following a 1.1% decline in September. Sales were still down 3.9% from year-ago levels.

Sales at building material and garden equipment stores were up 0.9% in October after a 0.4% gain in September. From a year earlier, sales were up 19.5%.

Apparel store sales plummeted in October, falling by 4.2% following a 13.6% increase in September. Clothing store sales are down 12.6% from a year earlier. That number is expected to keep falling, industry sources told MNI, as the nation's worsening Covid-19 outbreak drives consumers away from brick-and-mortar stores, which account for a large share of the market.
Other notable month-over-month declines came from department stores (-4.6%), sporting goods stores (-4.2%), general merchandise stores (-1.1%), furniture and home furnishing stores (-0.4%) and grocery stores (-0.4%).
MNI Washington Bureau | +1 202-371-2121 | brooke.migdon@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | brooke.migdon@marketnews.com

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