What a great kick off for the beginning of the year!
January’s 2023 retail sales rose much more than expected and the year-over-year growth in the retail is wonderful. With recession warnings from one end, and soaring sales on the other, it’s exciting to see how each category shifted and adjusted in 2023.
#1 - Retail sales in the USA soar 3% MoM, largest MoM increase since March 2021 [source], with online retail sales share now at 25%.
#2 - Food price inflation remains above 10%, the highest in decades. This could explain why discount grocery stores like Aldi and BJs experienced significant sales increases (13% and 15%, respectively) in January 2023 compared to December 2022, while most other grocery companies experienced declines.
#3 - Department stores saw an overall increase of ~3% in sales. Strengthened by 2022 growth, department stores look to further expand their category penetration with two major players investing heavily in Marketplace technology - Macy’s and Bed, Bath & Beyond.
#4 - Beauty sector is looking to affect consumer habits by offering excellent promotions in-store in January 2023, with limited promotions online. Resulting in decrease in online sales.
#5 - Home Furnishing sales were stable in January 2023 since December 2022, totalling an annual increase of 7% compared to January 2022. The new year starts with a trend of consumers looking for fresh changes - at a lower cost point.
#6 - Home Improvement sales went down 1% in January 2023 compared to December 2022. Consumers are shifting to necessary replacement projects following USA Real Estate market cooling down.
#7 - Electronics & Appliances sales were slightly down by 4% in January 2023 compared to last year. Earphones/headphones, power strips & wireless charges are the best sellers of January 2023.
#8 - Apparel sales declined by 17% in January 2023 compared to Dec 2022, likely due to post-holiday spending cuts. However, the sector saw a significant 37% YoY increase, indicating a positive long-term trend.
1. Beauty & Drugstore experienced a decline between January 2023 and January 2022. In fact, it had a high decrease across all categories in both time periods, with a 28% decline compared to January 2022 and a 15% decline compared to December 2022.
2. Beauty sector is looking to affect consumer habits by offering excellent promotions in-store, with limited promotions online. Buying your makeup refill is easier online, but it is harder to experience a new fragrance or a new type of makeup - and therefore beauty companies are looking to pull back consumers to brick-and-mortar shopping.
3. There is an opportunity for startup companies to create a new generation of technology that will bridge this gap.
1. Apparel sales declined by 17% in January 2023 compared to Dec 2022, likely due to post-holiday spending cuts. However, the sector saw a significant 37% YoY increase, indicating a positive long-term trend.
2. Cargo pants interest has been growing rapidly, and New York fashion week endorses them with many styles [source].
3. “Athleisure” is continuing to trend in January 2023, sportswear has become fashionable, they balance well comfort and style. Best pricing point is $20 to $40 [source].
4. Sustainable and ethical fashion continues to be a growing trend in the Apparel sector. Many major brands have introduced sustainable collections or made commitments to use more eco-friendly materials in their products.
1. Department stores saw an overall increase of ~3% in sales. This in spite of an increase of 6.4% in Consumer Purchase Index and a drop of 20%-40% in eCommerce sales.
2. On an annual outlook, Dillard's is leading the way with 44% increase in sales in 2022. Sears aside, all other department stores experienced an increase in sales compared to the previous year.
3. Strengthened by 2022 growth, department stores look to further expand their category penetration with two major players investing heavily in Marketplace technology - Macy’s and Bed, Bath & Beyond. It’ll be interesting to see how they will enter the new categories and will they build up a product assortment that adjusts fast to consumer trends.
1. Home Furnishing sales were stable in January 2023, totalling an annual increase of 7%.
2. The new year starts with a trend of consumers looking for fresh changes - at a lower cost point. Purchases of bold, geometric rugs have increased by 153%. The color that dominates floor tiles sales is - surprisingly - black, with a YoY 388% increase. [source]
1. Electronics & Appliances sales were slightly down by 4% in January 2023 from last year.
2. Earphones/headphones, power strips & wireless charges are the best sellers of January 2023 [source].
1. Home Improvement sales went down 1% in January 2023 compared to December 2022.
2. Household spend on Home Improvement averaged at $4000 in 2022 [source].
3. Necessary replacement products are an opportunity - a research by Harvard indicates consumers are shifting to necessary replacement projects following the USA Real Estate market cooling down [source]. These should be pushed forward in marketing campaigns, category online front-pages, and social media to capture maximum growth.
Grocery companies are investing in new categories and services to remain competitive, while the trend towards online shopping and healthy products continues to gain momentum.
1. When compared to the previous month - Groceries saw a decline in sales, with an average decrease of 3% in December 2022 compared to November 2022.
2. Food price inflation remains above 10%, the highest in decades. This could explain why discount grocery stores like Aldi and BJs experienced significant sales increases (13% and 15%, respectively) in January 2023 compared to December 2022.
3. Adapt.Online platform showing less promotions activity in January 2023 in the groceries sector.
4. The relatively good results in the Groceries sector in January 2023 despite less promotions and combined with significant price increases is a good sign for the strength of the economy.
5. In January 2023, Total Wine & More experienced a sharp 41% decline compared to the previous month with the termination of the promotions. However, compared to the same period last year, the company saw an increase of 21%. This could indicate a shift in consumer behavior towards premium wellness-positioned food and beverage.
6. In January 2023, Target and Walmart also experienced significant decreases of 20%-30% compared to the previous month. This could be due to various factors such as the impact of food price inflation, long-gone stimulus money, and lower consumer demand.
A more detailed list with the leading top retail websites in USA on the rise is below.
In January 2023, Retail leaders continued to focus on sales growth alongside increasing margins.
For companies that continue to invest in technology that increases customer experience, despite a bit of uncertain times, great times are ahead. These companies - Macy’s, Target, Walmart, Kroger to name a few following this strategy - are inspiring examples of confident leadership paving the way for us all.
If you are interested in more detailed data, or have inquiries about how this research can be used to increase sales in your business, kindly email us to research@adapt.online
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Head of marketing and technology, co-founder at Adapt. Share thoughts about #retailinnovation, #aitechnology, #investing, #marketing, and #entrepreneurship.
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