June 20, 2021

Supply chain constraints to blame for slight month-over-month decline.

Retail sales remained at elevated levels in May despite month-to-month fluctuations that masked near-record performance, according to the National Retail Federation.


“While May retail sales were down slightly, largely due to supply chain constraints, the more accurate indicator remains in the year-over-year data which, as the NRF calculates, showed growth of over 17 percent,” says NRF President and CEO Matthew Shay. “For the first five months of this year, retail sales are already tracking 17.6 percent above the same five months of 2020, giving us further confidence in our newly revised sales forecast of growth between 10.5 percent and 13.5 percent to more than $4.44 trillion for 2021.



Shay adds, “While there are downside risks related to labor shortages, supply chain bottlenecks, tax increases and over-regulation, overall, households are healthier, and consumers are demonstrating their ability and willingness to spend. We are confident.”



“Month-over-month comparisons and percentages of change simply don’t tell the story,” NRF Chief Economist Jack Kleinhenz says. “We are at a highly elevated level of spending, with dollar amounts in recent months some of the highest we’ve ever seen. Long-term trends in the number of dollars spent tell much more about the continuing economic recovery than whether sales were up or down from month to month.”



Kleinhenz adds, “Retail sales as calculated by NRF were the second highest on record in May, topped only by holiday spending in December. Demand has continued to be strong even as the concentrated impact from government stimulus has faded. There is still pent-up demand for retail goods and consumers are likely to remain on a growth path into the summer.”



The U.S. Census Bureau reported overall retail sales in May were down 1.3 percent seasonally adjusted from April but up 28.1 percent year-over-year. That compares with increases of 0.9 percent month-over-month and 53.4 percent year-over-year in April.



NRF’s calculation of retail sales — which excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed May was down 1.2 percent seasonally adjusted from April but up 17.3 percent unadjusted year-over-year. That compared with a month-over-month decline of 0.6 percent and a year-over-year increase of 30.9 percent in April. NRF’s numbers were up 22.3 percent unadjusted year-over-year on a three-month moving average.


Unadjusted May sales as calculated by NRF totaled $388.6 billion, the second-highest level of spending on record, outpaced only by $414.7 billion in December.


The new numbers come less than a week after NRF revised its 2021 annual retail sales forecast. Sales this year are now expected to increase between 10.5 percent and 13.5 percent over 2020 to between $4.44 trillion and $4.56 trillion. Online and other non-store sales, which are included in the total, are expected to increase between 18 percent and 23 percent to between $1.09 trillion and $1.13 trillion. As NRF’s monthly calculation, the forecast excludes auto dealers, gas stations and restaurants.

May sales declined month-over-month in two-thirds of retail categories but were up year-over-year in every category except grocery stores, led by usually large increases at retailers like clothing, electronics and furniture stores that were ordered to close last spring. Specifics from key retail sectors include:

  • Clothing and clothing accessory stores were up 3 percent month-over-month seasonally adjusted and up 198.7 percent unadjusted year-over-year.
  • Furniture and home furnishings stores were down 2.1 percent month-over-month seasonally adjusted but up 64.7 percent unadjusted year-over-year.
  • Health and personal care stores were up 1.8 percent month-over-month seasonally adjusted and up 25.8 percent unadjusted year-over-year.
  • General merchandise stores were down 3.3 percent month-over-month seasonally adjusted but up 9.3 percent unadjusted year-over-year.
  • Online and other non-store sales were down 0.8 percent month-over-month seasonally adjusted but up 8.2 percent unadjusted year-over-year.