Friday’s retail sales report, which we discussed in a B.I.G. Tips report, was a disappointment with the headline and core readings missing forecasts. In spite of this overall weakness, one area of strength continues to be the Non-Store category. This essentially encompasses any online retail whereas the General Merchandise category includes retailers like physical department stores. For the past decade, shopping in brick and mortar stores has been steadily declining with online shopping picking up the slack as it has since the 1990s. Late last year, Non Store sales overtook General Merchandise for the larger share of sales for the first time ever. General Merchandise now only takes up 11.28% of retail sales which is a record low while the Non Store category takes up a record high of 12.89% of total sales.
As the dispersion between online and physical shopping continues to widen, Non Store sales have actually become the second largest category (as a percentage of total sales) of Retail Sales behind only Motor Vehicles & Parts, which takes up over 20% of sales as shown in the chart below. Online retail not only takes up a larger share of the total pie than General Merchandise, but it’s also larger than sectors like Food & Beverage Stores and Bars & Restaurants.
Another interesting dynamic has been the tendency to eat out rather than in. The November report showed 12.35% of sales from the Bars & Restaurants (eating out) category compared to 12.39% from Food and Beverage stores (eating in). The spread between these two categories has continued to narrow recently, and it’s only a matter of time before “eating out” overtakes “eating in” at this point. Start a two-week free trial to Bespoke Premium to access all of our B.I.G. Tips reports, Annual Outlook Report, interactive tools, and much more.