Key takeaways:
- Top-line sales were unchanged from the previous month, but growth from a year ago held close to the previous month’s record.
- Online growth likely set a monthly record based on the broader nonstore measure, partly at the expense of in-store sales. Online promotions that typically occur later in the holiday season coupled with a later Prime Day were key reasons.
- Growth in the grocery channel suggests consumables spending remained robust in October, albeit perhaps a bit slower. It’s unclear if a slowdown in brick-and-mortar mass was due to consumables or only merchandise.
- Home improvement went from strength to strength, suggesting the end of summer isn’t slowing the channel down. An almost fifteen-year high in homebuilding and home sales are adding to sales.
- Apparel specialty and department stores lost some of the ground they gained in the previous month, partly due to increased online competition from their own online banners as well as Amazon and online mass.
- October’s growth is much stronger than Kantar’s fourth-quarter forecasts, but early online promotions likely pulled demand forward from later in the holiday period. October’s results were nevertheless an encouraging sign for in-store holiday sales at home improvement, specialty grocery, and mass, in addition to already expected strong online sales.
Top-line sales for core retail in October grew at a similar pace as September’s record year-to-year pace. Among the channels not included in this core retail measure are sales at restaurants and bars, which failed to improve on a seasonally adjusted month-to-month basis for the first time since many reopened in May. Restaurant and bars sales are still down 14% relative to a year ago. (Channel retail sales data from recent months is available at the end of this piece. Kantar Retail IQ clients can access more charts.)
Nonstore vs. brick-and-mortar: Nonstore, including online, accelerated in October, offsetting slower brick-and-mortar growth. Online promotions, including a delayed Prime Day, likely lifted online sales at the start of the fourth quarter. Recently released third-quarter sales for the narrower online channel posted 37% year-to-year growth, a slight moderation from 44% in the second quarter.
Supercenter, club, and small-format value: This combined channel eased in October, perhaps due to even more sales shifting to their online formats amid increased promotions. This comes after a very strong September for in-store growth in these mass channels, fed by 5.8% growth in the combined warehouse and club channel and 14% in the small-box value retailer channel.
Supermarket: This channel’s growth inched down in October, partly due to less food inflation.
Drug, health, and beauty care: Growth in this channel slipped in October after a strong September. Data from the previous month indicates growth in the narrower drugstore channel was the strongest since 2002.
Home improvement: This channel widened its lead over every other brick-and-mortar channel in October by posting its strongest growth since its record growth in June.
Apparel, jewelry, and shoe specialty: This channel didn’t improve in October on a month-to-month or year-to-year basis. Online sales of soft goods likely dampened growth in this channel.
Traditional and discount department: This combined channel reverted back to a double-digit decline in October after greatly improving in September. Online promotions likely siphoned away more brick-and-mortar sales.
