U.S. retail sales continued their heady ascent, rising 13.9% year over year in July excluding autos and fuel — the slowest rate since February. Non-store sales rose only 3.7% year over year, suggesting the shift to e-commerce from in-store shopping may have slowed. Non-store sales surged during the COVID-19 pandemic as many regions underwent lockdowns, and this slowdown in growth likely represents the already expanded footprint of e-commerce, with growth against July 2019 standing at 24.9%.
Imports of consumer discretionary goods continue to soar as retailers attempt to keep up in peak season, as discussed in Panjiva's research of Aug. 11. Much of this may represent the continued service of pent-up demand from fiscal stimulus and lockdowns, with retailers likely hoping to maintain this momentum through the holiday season. Clothing stores saw the largest estimated growth of 45.8% year over year, showing how depressed sales in 2020 may be contributing to supply chain congestion as sales against July 2019 were up only 19.8%. Outdoor activities also remain popular, with July sales up 40.1% versus the same month in 2019, potentially indicating a shift in consumer preferences caused by the pandemic.
Panjiva U.S. seaborne data shows that Vietnam has benefited from sourcing shifts. Retail-related imports from the country increased 86.5% year over year in the second quarter, and the share of imports increased to 9.6% in July from 8.3% in the second quarter. This came at the expense of countries that are not in the top 20 retail importers, which saw their share fall by 2.4 percentage points from the second quarter to July. Chinese retail imports remained relatively stable, with their share increasing by 0.2 percentage points from the second quarter even though imports in July fell 2.6% year over year. Vietnamese and Chinese imports will likely face further changes as the impact of factory closures and congestion in the two countries work their way down supply chains.
The persistence of these new trends will likely start to impact longer-term planning at retailers. One example is Walmart Inc., where tight capacity has led the company's merchandisers to start "chartering vessels specifically for Walmart goods." That follows a similar move by The Home Depot Inc., as discussed in Panjiva's research of June 16. Panjiva data shows there were 245,000 twenty-foot equivalent units of U.S. seaborne imports linked to Walmart in the past 12 months, handled predominantly by CMA CGM SA. Walmart also may have hit congestion in mainland China, with growth in volumes from the region falling to 2.5% year over year in July from 64.0% year over year in the second quarter.
Eric Oak is a researcher at Panjiva, a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.