Today's retail sales numbers show that retail sales, excluding food service sales, rose 2.2% on a year-on-year basis.
Sales are growing much slower than we saw prior to the growth peak in 2014. Although today's report showed an increase versus August, we see that growth has been around these levels almost the entire year.
Furniture and home furnishing stores have lost some steam too. Growth used to be above 5% since 2011. Current growth rates are hovering around 2.5% since Q2 of this year.
Motor vehicle sales didn't show an improvement this month and stayed at 2.5%. The exact same growth rate as we saw in August.
Clothing and accessories had the second positive print since February of this year after slowing since Q3 of 2014. However, sales have to growth much harder to give companies in this highly competitive business some relief.
Electronics and appliance stores are doing much worse. The contraction got a bit worse in September. We now have twelve months with contraction(!).
The last graph shows food services and drinking places. Growth is back at 6% which is a huge tailwind for companies in this business. I do not expect sales growth to go back to 9-10% but levels around 6-7% are definitely bullish.
Overall, I am not surprised after seeing these numbers. Retail sales stay at low levels after the 2014 slow down. We are witnessing an economic late-cycle stage. If you want to know more about this topic, feel free to read my latest article about a late-cycle stage.
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