Facteus US Retail Sales Forecast
Today Facteus is launching its inaugural US Retail Sales Forecast. We are using our proprietary consumer transaction data to provide the market a forecast of the Advance Monthly Retail Trade Report (MARTS),typically published the second week of every month by the US Commerce Department. The MARTS report has long been the bellwether indicator of the health and trajectory of the retail economy in the US, and the report is of particular importance given the current economic environment.
The Facteus US Retail Sales Forecast uses the consumer transactions from a panel of 29 million monthly active cards to model the aggregate retail forecast (excluding autos) and select retail sub-categories that are found in the MARTS report. Additional information on the MARTS report can be found at www.census.gov/retail. Our initial forecast, focused on the upcoming March 2020 report, is below.
Aggregate Retail and Food Services Sales (ex auto sales)
Overall consumer spending stayed modestly positive in the first half of March and then took a dive starting with the weekend of March 15. By the last week of March, consumer spending declined to a run rate 25% below the same period in 2019. For the month of March as a whole, we are forecasting a year on year decline of -8.1%, with a 90% confidence interval of ±3.5%.
Food Service Sales
Not surprisingly, the food service sector was hit particularly hard by shelter-in-place orders. Order takeout and delivery were not enough to offset the loss of dining-in business. By the last week of March, consumer spending on food services was running at more than 50% below the prior year period. We are forecasting a year on year decline of 29.8% for the food service sector, with a 90% confidence interval of ±3.5%.
Food and Beverage
Supermarkets and grocery stores saw a surge in spending in the 3rd week of March. At the peak, sales were running 40% above the prior year period. However, the surge quickly ended and the sector exited the month with sales run rate at 5% above prior year. We are forecasting a year on year growth of 19.4% for the sector, with a 90% confidence interval of ±4.2%.
General Merchandise Sector
The impact of the COVID-19 outbreak on the general merchandise sector was mixed. We saw evidence of hoarding and panic buying in the first two and half weeks of the month, with consumer spending peaking at 20% above prior year period. Spending then dropped off sharply and ended the month at a run rate of about 15% below prior year. We are forecasting a year on year growth in March of 0.6% for the general merchandise sector, with a 90% confidence interval of ±3.2%.
Non-Store Retail Sales
Internet and mail-order retailers were big beneficiaries of physical store closures and their sales grew steadily through the month of March. We are forecasting a year on year increase of 18.0%. The Census Bureau Advanced Monthly Retail reports suffer from the difficulty of applying traditional survey methods to an Internet sales channel; we have a wider confidence interval of ±7.6% for this prediction.
Facteus is a provider of payments-based business intelligence (BI) solutions for processors, investment companies, financial institutions, and retail corporations. Facteus is a leader in transaction-based analytics, programs and data solutions, transforming the billions of raw transaction data from legacy technologies into actionable information, which enables companies to make intelligent business decisions and automate manual operational tasks. Founded in 2010, Facteus’ team of data scientists and payments industry veterans provide source data from billions of payment transactions to deliver timely, rich insights that can be used for machine learning, artificial intelligence, data monetization and other strategic use cases. To learn more, visit www.facteus.com.