Grocery store sales growth flattens out in November

Grocery retail sales inched up just 0.1% on both a monthly and an annual basis in November, the U.S. Census Bureau reported. / Photo by Russell Redman

A slight rebound in total U.S. retail sales for November—spurred by the start of the holiday selling season—didn’t give much of a lift to grocery stores, which saw sales growth shrink as inflation continues to tail off.

For November, retail and foodservice sales edged up 0.3% to $705.69 billion (seasonally adjusted) from $703.75 billion in downward-revised data for October and climbed 4.1% from updated figures for November 2022, the U.S. Census Bureau reported in advance estimates on Thursday.

Retail trade sales—excluding motor vehicles, parts stores, gas stations and repair shops—grew at slower rates in November, up just 0.1% sequentially to nearly $611.0 billion (seasonally adjusted) and rising 3.1% over 12 months.

The November results compared with downward-revised figures for October, in which retail and foodservice sales dipped 0.2% month to month but rose 2.2% year over year. Similarly, October retail trade sales fell 0.3% monthly yet gained 1.3% annually.

“November showed a strong rebound in retail sales from October and continued resilience of the U.S. consumer during the holiday shopping season. Retailers have been offering hefty discounts throughout this holiday season to attract customers to their stores, and lower gasoline prices allowed for some money to be spent elsewhere,” according to Naveen Jaggi, president of retail advisory services at commercial real estate firm Jones Lang LaSalle (JLL). “Retail sales also saw increases spend at grocery stores, car dealers, health and personal care stores, and restaurants and bars,” he added.

Grocery retail sales inched up 0.1% to $74.31 billion (seasonally adjusted) in November from $74.25 billion in downward-adjusted numbers for October, when sales also were up 0.1% sequentially, according to the Census Bureau. November grocery store sales ticked up 0.1% from a year ago, less than the 0.5% downward-revised increase for October.

Sales at all food and beverage stores in November generated only slightly higher growth versus grocery, up 0.2% monthly to $82.84 billion from an updated $82.22 billion in October and rising 0.4% over 12 months. The Census Bureau’s downward-adjusted data for October showed gains of 0.1% month to month and 0.7% year over year for the core retail segment.

From U.S. Census Bureau

Holiday discounts, lower inflation provide impetus

“November retail sales grew more than expected, as pre-holiday sales and inflation relief in general likely helped spur on spending among consumers. The increase was driven mainly by growth in online shopping and food services, suggesting that online retailers continue to gain share of wallet and spending on experiences like dining out is increasingly being prioritized in consumer budgets,” Kayla Bruun, economic analyst at data intelligence firm Morning Consult,” said in an email to Winsight Grocery Business on Thursday.

On Tuesday, the U.S. Bureau of Labor Statistics reported that the November Consumer Price Index rose 3.1% (unadjusted) year over year, after being up 3.2% in October—putting annual levels back on the downward trend after the September-August-July period had ended 12 months of yearly declines in the CPI. On a monthly basis, the November CPI was up just 0.1% (seasonally adjusted) following no gain in October. Food-at-home prices rose 0.1% month over month and 1.7% year over year for November, down from 0.3% monthly and 2.1% annually for October.

“While U.S. adults continue to express weariness over elevated price levels, inflation relief in certain categories and the resilient labor market has so far enabled many households to find ways to keep spending ahead of the holidays,” Bruun added.

Claire Tassin, retail and e-commerce analyst at Morning Consult, noted that the inflation letup and retailer holiday specials provided the occasion for more discretionary and non-discretionary purchases in November.

“November’s retail sales report reflects some elevated discretionary spending as holiday shopping took off last month. Sporting goods, hobby, musical instrument and book stores were top performers month over month, though consumer spending remains uneven as department stores were notably down,” Tassin explained in emailed comments. “Online sales performed particularly well across the Black Friday and Cyber Monday weekend and are a bright spot in this month’s report. Consumers shopped for themselves more often during those events this year than last year, indicating that shoppers used the sales for more day-to-day purchases in addition to holiday gifting.”

From the National Retail Federation

Consumers show ‘capacity to spend’

Earlier this week, the National Retail Federation reported U.S. retail sales up nearly 0.8% monthly (seasonally adjusted) in November, topping a roughly 0.1% sequential decrease in October, based on data from its recently introduced CNBC/NRF Retail Monitor, powered by Affinity Solutions. Year over year, total retail sales grew 4.2% (unadjusted) for November versus an almost 2.6% gain in October.

NRF said the Retail Monitor pegged core retail sales—excluding automobile dealers, gas stations and restaurants—as edging up just over 0.7% sequentially and about 4.2% annually for November, compared with a 0.03% monthly decrease and a more than 2.6% increase for October.

On Thursday, NRF reported that, on an unadjusted basis, core retail sales advanced 3.3% year over year on a three-month moving average through November and were up 3.7% for the first 11 months of 2023. NRF has projected that core retail sales for the 2023 holiday season—running Nov. 1 through Dec. 31—will grow 3% to 4% year over year to between $957.3 billion and $966.6 billion.

“Today’s report highlights consumers’ strength and continuing capacity to spend,” NRF Chief Economist Jack Kleinhenz said in a statement. “Jobs and wage gains together with falling energy prices have supported holiday shopping, as we predicted. Lower inflation for goods has helped savvy consumers make smart decisions about holiday purchases. The year-over-year comparison shows spending is on track to meet our projection for a sound holiday shopping season.”

November retail sales increased on both a monthly (seasonally adjusted) and a yearly (unadjusted) basis in seven of the nine categories tracked by the Retail Monitor, NRF said. Only building and garden supply stores (-1.2% month over month and -0.06% year over year) and furniture and home furnishings stores (-0.04% month over month and and -2.08% year over year) posted sales decreases.

Grocery and beverage store sales ticked up 0.84% month to month seasonally adjusted in November and 3.19% unadjusted annually, Retail Monitor data showed. Among other retail categories in the food, drug and mass channel, November sales grew 1.6% month over month seasonally adjusted and climbed 9.15% unadjusted year over year for health and personal care stores (including drug stores), and general merchandise stores saw gains of 1.03% month over month seasonally adjusted and 0.61% unadjusted year over year.

Also recording month-over-month (seasonally adjusted) and year-over-year (unadjusted) sales growth in November were online and other non-store retailers (+0.8% monthly and +26.27% annually); sporting goods, hobby, music and book stores (+1% monthly and +8.25% annually); clothing and accessories stores (+0.87% monthly and +5.81% annually); and electronics and appliance stores (+0.1% monthly and +0.1% annually).

“November Retail Monitor data shows that consumers are embracing the holiday season and promotions being offered by retailers,” according to NRF President and CEO Matthew Shay. “Value-conscious shoppers are out looking for deals as they purchase gifts for family and friends, and this data indicates that they’re finding them. Since November makes up half the holiday season, these numbers are a positive indication of what we can expect for the full holiday season.”