What the Latest News from the Commerce Department Means for Pet Stores
Each month, the Commerce Department issues a report on the performance of retail sales. The January government shutdown delayed this data release the past few months, but the advanced report for February is finally here. However, the story it tells isn’t very good.
The report estimates that February retail sales dropped 0.2 percent from the previous month. While this may seem like a minimal change at first glance, it echoes the poor performance that retail sales had in December, when they fell a worrying 1.6 percent at the height of holiday spending. Though there was a small gain of 0.7 percent in January, this wasn’t enough to offset the dismal December numbers.
Though the economy initially saw positive movement in the fall as consumer spending increased as a result of tax cuts and low gas prices, February’s figures signal that these boosts have likely faded. The shutdown, bad weather and a sluggish start for tax refund disbursement may have also restrained retail sales.
Digging deeper into the data reveals an even more troubling trend for pet retailers. It is estimated that miscellaneous retailers—a category that includes pet stores—saw their February sales drop more 1.6 percent from January. When compared to February 2018, they fell 4.6 percent.
While brick-and-mortar retailers saw declines, the category of “nonstore retailers,” which includes ecommerce giants like Amazon, saw a 0.9 percent increase from January to February, and a 10 percent increase over February 2018. These numbers reflect the growing strength of online sales.
With 2019 off to a shaky start, pet retailer should pay attention to see if the March data shows any improvement. They also should keep in mind that this downward trend isn’t just limited to miscellaneous retailers. Categories like food, clothing, electronics and department stores saw declines as well. Retail sales’ mixed performance indicates that the economy as a whole could be cooling off.