Retail Sales Remain Strong Despite More Shoppers Staying Indoors
- Consumer spending healthy in October. Core retail sales, which excludes gasoline and motor vehicles, rose 1.4 percent last month.
- Fear of COVID-19 does not deter consumers. Online spending climbed 4.0 percent last month as more people avoided crowds to prevent exposure to the delta variant.
- Brick-and-mortar retail fundamentals strong. In the third quarter, retail vacancy dipped 20 basis points to 5.3 percent, indicative that more shops are opening ahead of the holiday shopping season.
Sales Restrained by Headwinds
- Supply chain issues remain impediment to sales. Although the ports of Long Beach and Los Angeles have taken measures to increase the speed at which cargo ships move through the system, dozens of vessels remain anchored offshore and the average time to unload is still 17 days.
- Inflation concerns escalate. The rise in prices are increasingly looking like they are less transitory and are unlikely to decrease even when the annual gain returns to historically normal levels.
Sources: Marcus & Millichap Research Services; Bureau of Labor Statistics; CoStar Group, Inc.; U.S. Census Bureau; U.S. Energy Information Administration