The most recent information from our Retail Trade and Food Service Sales data show that consumers maintained a summer of soaring spending during July and August. Compared to a year earlier, the July-August average was up 15.6% in Arkansas. In the national Retail Sales data from the Census Bureau, consumer spending was up 15.2% over the same time span. Relative to pre-pandemic levels, the summer’s retail sales figures are even more remarkable. Compared to July-August of 2019, the figures for this past summer were up 25.8% in Arkansas and 18.7% nationwide.
A breakdown of these growth rates by industry group shows that the increased spending is across-the-board. The smallest increases from 2020 to 2021 were sales at Food and Beverage Stores — up only 2.6% in Arkansas and 4.6% in the U.S. data. The largest increases were in spending at Gasoline Stations, where much of the increase can be attributed to higher gasoline prices.
The series for Food and Beverage Stores is a prime example of a persistent change in consumer spending patterns since the onset of the COVID-19 pandemic. After surging in the early months of the pandemic as households stocked-up on supplies, spending at this subset of retailers has settled in at around 16% higher than the summer of 2019.
Another sector with persistently robust sales growth over the past two years is Building Materials and Garden & Equipment and Supplies. This spending category saw increases early in the pandemic, when many areas of the country were under lockdown, and has continued to surge above pre-pandemic levels. Over the summer months of July and August, spending in this sector was up from the previous year by 13.1% in Arkansas and 7.6% nationwide. These increases were on top of sharp gains recorded the previous year.
Two sectors that have shown the largest increases in sales over the past year are Clothing and Clothing Accessories Stores and Gasoline stations. The increased spending at gasoline stations partly reflects a recovery in travel, but largely reflects swings in gasoline prices during the recession and recovery phases. In Clothing and Clothing Accessories, the spending patterns clearly display the resilience of the Arkansas consumer sector. The initial decline in spending was not nearly as large in Arkansas as the rest of the country, and by the summer of 2020 clothing store spending had fully recovered in Arkansas but still lagged pre-recession spending levels by more than 18% nationwide. By the summer of 2021, nationwide spending in this sector had recovered to stand 14.8% higher than in the summer of 2019. Here in Arkansas the increase from the summer of 2019 to the summer of 2021 was 24.5%.
Increases in consumer spending over the past year have been boosted by unprecedented surges in personal income, as government support and stimulus programs have boosted consumers’ purchasing power. As personal income growth returns to its longer run trend, retail sales growth will necessarily slow. It will be interesting to see how recent changes in the mix of consumer spending across subsectors will persist.
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Data on Arkansas Retail Trade and Food Service Sales are constructed by the Arkansas Economic Development Institute using tax collection information from the Arkansas Department of Finance and Administration. Documentation of Methodology is available here: Arkansas Retail Sales—A New Data Set from AEDI.
Data for Arkansas Retail and Food Service Sales for July 2017 through August 2021 are available in an Excel Spreadsheet: Arkansas-Retail-Sales-Aug-2020. The data set includes statewide aggregates and components, both seasonally adjusted and not-seasonally adjusted. County-level data for Total Retail and Food Service Sales excluding Gasoline are available on a not-seasonally adjusted basis.