Despite recent geopolitical events, the omicron variant, declining consumer confidence and rising inflation, US retail and foodservice forward estimates for February 2022 have risen. Retail sales recorded a seasonally adjusted total of $658.1 billion in February, an increase of 0.3% from January 2022, although sales grew at a slower pace than the 4 .9% month-on-month in January as rising inflation and ongoing supply chain hurdles dampened sales. Year over year, February 2022 retail sales were up 17.6% from the same period a year ago.
Despite significant challenges posed by ongoing supply chain issues, inflation and geopolitical events, consumers continue to show resilience and willingness to spend as they continue to propel the economy forward. Retailers remained committed to providing their customers with the experience and products they demand as retailers continue the massive shift from just-in-time inventory to back-up inventory and alternate supply sources.
While February 2022 retail sales illustrate the persistence of a strong labor market where wages are being pushed up and therefore providing consumers with growing household wealth and more purchasing power, there is no no doubt that high levels of inflation wreak havoc on consumers’ wallets and therefore likely to dampen spending in an environment of rising consumer prices. While consumers are reasonably well equipped to continue spending, the conflict in Ukraine could dampen spending going forward.
Year-over-year, all retail categories grew and grew the most at gas stations (36.3%) and food services and drinking places (33.0%) . Month-over-month retail sales were down in 7 of 13 retail categories, with the largest declines seen at non-store retailers and health and personal care stores, -3.6% and -1.7% respectively.