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March 21, 2022

NRF: February Retail Strong Versus 2021 but Gains Slowed

NRF Upgrades 2021 Retail Forecast After Strong First Half

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Retail sales showed a strong year-over-year gain in February, but the monthly pace slowed after January as inflation drove up prices and lingering effects of COVID-19 omicron hit the supply chain, according to the National Retail Federation.

United States Census Bureau research reported that overall retail sales in February were up 0.3% seasonally adjusted from January and up 17.6% year-over-year after a monthly increase of 4.9% in January over December and a 14% increase in the 2022’s inaugural month versus the period in 2021, NRF noted. Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, NRF pointed out.

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants – revealed that February slipped 1% seasonally adjusted from January’s revised numbers but gained 13% unadjusted year-over-year. In January, sales grew 5.9% month-over-month and 9.6% year-over-year.

Based on an appraisal of the sales data, NRF has forecast that 2022 retail sales will increase between 6% and 8% to total between $4.86 trillion and $4.95 trillion.

In specific channels, as defined by the Census Bureau:

  • General merchandise stores were down 0.2% month-over-month seasonally adjusted but up 12.6% unadjusted year-over-year.
  • Furniture and home furnishings stores were down 1% month-over-month seasonally adjusted but up 7.4% unadjusted year-over-year.
  • Electronics and appliance stores were down 0.6% month-over-month seasonally adjusted but up 2.6% unadjusted year-over-year. 
  • Building materials and garden supply stores were up 0.9% month-over-month seasonally adjusted and 14.9% unadjusted year-over-year.
  • Online and other non-store sales were down 3.7% month-over-month seasonally adjusted but up 13.9% unadjusted year-over-year.
  • Health and personal care stores were down 1.8% month-over-month seasonally adjusted but up 8.7% unadjusted year-over-year.
  • Grocery and beverage stores were down 0.5% month-over-month seasonally adjusted but up 8% unadjusted year-over-year.
  • Clothing and clothing accessory stores were up 1.1% month-over-month seasonally adjusted and 31% unadjusted year-over-year.
  • Sporting goods stores were up 1.7% month-over-month seasonally adjusted and 11.6% unadjusted year-over-year.

“Retail sales data continues to show impressive consumer resilience,” NRF president and CEO Matthew Shay said in announcing the sales data. “Despite all that’s been thrown at them including inflation, supply chain constraints, market volatility and significant geopolitical events, consumers remain able and willing to spend. Retailers are nimble and are dedicated to serving their customers with great experiences, great products and services at the best possible prices they can. Our outlook remains constructive, with solid retail sales growth for all of 2022 increasing by 6% to 8%. Consumer financial health can continue if current pressures in the economy are moderated by sound policy decisions that do not compound the challenges our economy is already facing.”

NRF chief economist Jack Kleinhenz said, “February retail sales reflected continued strong labor market conditions but were certainly affected by higher consumer prices. With the highest levels in 40 years, there is no doubt continued increases in inflation are hitting household purchasing power and likely restraining spending. We shouldn’t be surprised by the slower pace of sales given that purchases had surged in January and the upward revisions made to those numbers. And the double-digit year-over-year increase was expected given that much of the economy was still in stay-at-home mode a year earlier. February’s sales are another sign of the economy’s resilience, but the conflict in Europe is an increasing headwind that could dampen spending around the globe.”

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