Friday, November 25, 2011

More October-November Retail Stats

Yesterday I showed retail sales for two categories (all retail and general merchandise stores) for three years (1992, 2002, and 2010). Today I am showing data on October and November sales for the same two categories and for every year in the 1992 through 2010 period.

My object, of course, is to throw some light on Black Friday, the day when, based on the retail industry’s experience, retailer begin to turn a profit for the year. My focus is on the general trend, and the graphics today do a better job in illuminating which way things are trending over an eighteen-year period. Here are the two charts:

What these patterns shows is that the October-to-November jump in sales is much more important for general merchandise stores than for retail sales as a whole. The latter have much bigger gains in this month, averaging 16.8 percent over the period versus retail as a whole, averaging 3.4 percent. The trend in month-to-month percentage gains is down in both cases, but the decline is much more pronounced for the general merchandise stores.

By way of contrast, the following graphic shows the same patterns for book stores. The performance of these retailers falls somewhere midway between all retailing and merchandising stores. The average percentage jump in sales, October to November, is better than for retailing as a whole, thus 5.3 versus 3.4 percent—but less than shown for general merchandise stores. And the trend, it turns out, is flat.

So what do we make of these trends—particularly the smaller-and-smaller jump in retail sales, October-to-November, experienced by general merchandise stores. Behind that trend, I propose, lies another and much more pervasive one. It is the gradual blurring of once much more sharply defined retail categories. Consider, for instance, that the largest grocery store in the United States is Wal-Mart. But for purposes of reporting, the Census Bureau categorizes Wal-Mart as a general merchandise store (NAICS 452910) whereas the Bureau places Kroger into the supermarkets and other grocers category (NAICS 445110). Wal-Mart-owned Sam’s Club has been featuring groceries since 1983; regular Wal-Mart stores have sold food at least since 1990, the year Wal-Mart acquired McLane Company (which it later sold), a grocery and food distributor. I am tentative about the date because I cannot discover exactly when Wal-Mart began selling groceries; maybe it always did. At present, according to Wal-Mart, half of its revenues are derived from groceries. Have they always? And under a 2010 program the company is restructuring small stores to be principally grocery stores.

Now, mind you, other major general merchandise stores are also selling groceries. One thinks of Costco and other warehouse clubs. And so are Kmart, Sears (which is owned by Kmart), Meier, and Target. So also are drug stores, for that matter. This is what I mean by a fuzzing of the definitions.

Quite possibly the ever smaller sales jumps of general merchandisers in November have something to do with internal shifts in the share of the product lines that they carry. As these stores come ever more to resemble “all retailing,” so also will Black Friday gradually grey out.

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