U.S. nonstore retail sales grew in June by the highest year-over-year rate of any month in recorded history, new U.S. Department of Commerce data shows. This suggests coronavirus-related surges in online spending endure even as the economy is reopening and sales through other channels are picking back up after recession-level drops.
Consumer spending through nonstore channels swelled 29.6% year over year last month, according to a Digital Commerce 360 analysis of the Commerce Department’s advance monthly figures released Thursday. Numbers exclude estimated fuel sales. That was nearly double the 15.9% growth registered in June 2019 and more than double the 11.6% rate recorded in February 2020, the last full month before stay-at-home orders were issued and store closures were widespread.
Year-over-year nonstore spending increases have been steadily growing since March, when the global pandemic took hold in the United States and President Donald Trump declared a national state of emergency. May edged out April’s already impressive 23.9% nonstore spending growth, reaching 24.3%.
The nonstore channel also was the main driver for overall retail growth in June, accounting for nearly two-thirds–63.3%–of all gains for the month. That’s a particularly high share.
The Commerce Department’s nonstore sales—which are mainly online but include other sales such as orders through call centers, catalogs, door-to-door visits and vending machines—don’t align perfectly with spending captured in the pure ecommerce figures that the agency releases quarterly. But the data is an early indicator of trends in the online sector. Digital Commerce 360 analyzes non-seasonally adjusted Commerce Department data.
Online sales near peak-season demand
“Ecommerce has continued to soar through the month of June as the COVID-19 pandemic continues in the United States,” said Frank Poore, CEO of ecommerce software provider CommerceHub. “The majority of consumers are still choosing to do their shopping from the safety of their homes rather than take the risk of traveling to physical retailers.”
CommerceHub’s retail clients reported record growth in online order volume in June after an April-May period with north of 100% year-over-year growth and “close to peak holiday season demand,” according to Poore.
Adobe Analytics, the data insights arm of software firm Adobe Inc., also has reported significantly higher ecommerce sales in June, although online spending is beginning to plateau from earlier COVID-19 levels. According to the firm’s data, U.S. consumers continued to move more of their shopping online, with web sales reaching $73.2 billion last month, up 76.2% year over year from $41.5 billion in June 2019. While June online sales were down 11.3% from May’s $82.5 billion, the decrease is a typical seasonal trend, said Vivek Pandya, Adobe’s digital insights manager. April-June spending is still tracking above 2019 holiday season levels, Pandya added.
Adobe’s data is based on more than 1 trillion online visits to retail sites, including 80 of the top 100 retailers in the Digital Commerce 360 Top 1000, and covers more than 100 million SKUs. Adobe also shares data with several government bodies and industry trade organizations, including the U.S. Bureau of Labor Statistics, the Federal Reserve and the U.S. Census Bureau.
Retail not out of the woods as COVID-19 cases spike
With states increasingly relaxing coronavirus-related business closures and stay-at-home orders, overall retail sales had a big comeback in June as most stores reopened their doors. Spending through all channels for Digital Commerce 360-defined segments grew an impressive 9.1% year over year, excluding estimated fuel sales. June’s sales bump was more than seven times higher than the 1.3% uptick in May and a giant swing from April’s 5.4% plunge. Last month’s registered growth also marks the highest year-over-year rate ever recorded for June.
Digital Commerce 360’s calculation of total retail sales—which excludes sales in segments that don’t typically sell online, such as restaurants, bars, automobile dealers, gas stations and fuel dealers—differs from overall Commerce Department data as sales in many of the omitted categories have fluctuated considerably during the COVID-19 period.
While June’s sales figures are encouraging, retailers aren’t out of the woods yet, since the country is grappling with a resurgence of the pandemic as infection rates rise in many parts of the country, according to Jack Kleinhenz, chief economist at the National Retail Federation.
“Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country is a major threat to the recovery,” he said. “These outbreaks are alarming, and if they accelerate, will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”
The durability of recent retail spending gains will be directly tied to how widespread spikes in coronavirus cases become, Kleinhenz added. Some states have paused or backpedaled reopening plans in the wake of alarming testing results, and if stores are forced to close again, that will certainly cause retail numbers to regress.
Percentage changes may not align exactly with dollar figures due to rounding.