Core retail sales inch down in March in all but three categories

Spending cooled in March as Americans pulled back on spending amid smaller tax refunds and worries about the economy.

Retail sales edged down 0.5% in March from February, but were up 4.6% year-over-year, according to the National Retail Federation, whose calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail.

Sales were down in all but three categories — online, sporting goods and health/personal care — on a monthly basis.

“These results reflect both slower economic activity and lower prices because of easing inflation – which means fewer dollars spent even if consumers buy the same number of goods – but there is still a lot of spending in the economy,” said NRF chief economist Jack Kleinhenz.

Kleinhenz added that households tend to shop less during the post-holiday season and tax refunds, which typically contribute to spending at this time of year, are smaller this year than last.   

“Nonetheless, we are still looking at positive sales growth moving forward in 2023,” he said. The NRF has projected that 2023 core retail sales will grow between 4% and 6% over 2022, to total between $5.13 trillion and $5.23 trillion. 

The U.S. Census Bureau said that overall retail sales in March were down 1% from February. (In February, sales were down 0.2% month over month but up 5.9% year over year.)  Excluding auto dealers and gas stations, sales declined  0.3%.  Sales inched up 0.1% at restaurants and bars.   

“While sales were marginally down from February 2023, we did see increases from March 2022,” commented Naveen Jaggi, president Retail Advisory Services, JLL.  “Notably, food services and drinking places were up 13%, general merchandise stores were up 2.4% and health and personal care stores were up 7.1% year over year. In March 2023, retail foot traffic universally rose from February levels, particularly for theaters, attractions and sporting goods stores.”

Specifics from the key  core retail sectors are below.

• Online and other non-store sales were up 1.9% month-over- month and up 12.4% year-over -year.
• Health and personal care stores were up 0.3% month-over-month and up 7.3% year-over-year.
• Grocery and beverage stores were down 0.1% month-over-month but up 5.6% year-over-year.
• Sporting goods stores were up 0.2% month-over- month and up 3.3% year-over-year.
• General merchandise stores were down 3% month-over-month but up 2.9% year-over-year.
• Furniture and home furnishings stores were down 1.2% month-over-month and down 1.9% year-over-year.
• Clothing and clothing accessory stores were down 1.7% month-over-month and down 2.2% year-over-year.
• Building materials and garden supply stores were down 2.1% month-over-month and down 4.3% year-over-year.
• Electronics and appliance stores were down 2.1% month-over-month and down 9.9% year-over-year.