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Economy in Brief

U.S. E-Commerce Retail Sales Contract in Q3
by Sandy Batten  November 18, 2021

• The first quarterly decline in three quarters.

• Decline was widespread across sectors.

Online retail sales, more formally known as “E-Commerce sales,” fell 3.3% q/q SA (+6.6 y/y) in the third quarter of 2021 following a 3.1% q/q increase in Q2 and a 7.8% q/q jump in Q1, according to the U.S. Census Bureau.

The quarterly decline in Q3 was larger than the 1.1% q/q SA decline (+13.1% y/y) in total retail sales in Q3. This measure of total retail sales excludes food services and restaurant sales. E-Commerce sales in Q3 accounted for 13.0% of total retail sales versus 13.3% in Q2, 13.6% in Q1, 13.6% in 2020 and 10.7% in 2019.

Sector details in the E-Commerce report are not seasonally adjusted. Sales of nonstore retailers, which accounted for 56.5% of total E-Commerce sales in Q3, fell 2.6%% q/q (+10.0% y/y) after having rebounded 8.6% q/q in Q2. Online sales of motor vehicles and parts slumped 6.0% q/q (+19.6% y/y), reversing about a third of their 18.9% jump in Q2. This was their first quarterly decline in six quarters. One of the few quarterly increases in Q3 online sales was posted by furniture and home furnishings, which were up 4.8% q/q (+8.2% y/y) on top of a 2.9% q/q increase in Q2. The only other major category to report a quarterly gain in Q3 was sporting goods, hobby, musical instruments and books, which rose 3.1% q/q, but these sales were 2.7% lower than a year ago.

Online general merchandise sales slumped 7.5% q/q (+4.4% y/y) but did not give back all of the 9.4% gain in Q2. Online sales of building materials and garden equipment declined 4.8% q/q in Q3 after an outsized 31.7% q/q surge in Q2. This quarterly swing likely reflects seasonal influences as the sector data are not seasonally adjusted. Still, compared with a year ago, these sales were up a solid 20.2%, the largest y/y gain of the major sectors.

E-commerce sales are goods and services ordered over an Internet, mobile device (M-commerce), extranet, Electronic Data Interchange (EDI) network, electronic mail, or other comparable online system. Payment may or may not be made online and sometimes sale and price are negotiated. Total sales estimates are adjusted for seasonal variation, but not for price changes. They are also adjusted for trading-day differences and moving holidays.

The retail sales and retail E-Commerce sales data can be found in Haver's USECON database.

Shares Q3-21 Q2-21 Q1-21 Y/Y 2020 2019 2018
Total Retail Sales (% chg) -1.1 5.2 8.1 13.1 3.1 3.0 4.2
Total E-Commerce Sales (SA) -3.3 3.1 7.8 6.6 31.7 14.1 14.4
Total E-Commerce Sales (NSA) 100.0 -3.2 7.4 -16.6 6.8 31.8 14.3 14.2
   Nonstore Retailers 56.5 -2.6 8.6 -11.9 10.0 23.1 13.6 --
   Motor Vehicles & Parts 8.0 -6.0 18.9 4.5 19.6 14.9 12.4 --
   Furniture & Home Furnishings 2.3 4.8 2.9 -16.9 8.2 50.0 11.9 --
   Building Materials & Garden Equipment 3.7 -4.8 31.7 -5.6 20.2 64.4 16.9 --
   Clothing & Accessories 6.9 -2.2 9.4 -33.0 5.4 26.4 9.6 --
   General Merchandise 8.8 -7.5 9.4 -35.6 4.4 52.4 21.5 --
   Food & Beverages 3.0 -0.8 -9.8 -0.1 -0.2 141.1 57.7 --
   Sporting Goods, Hobby, Musical Instruments & Books 1.5 3.1 2.1 -27.2 -2.7 62.8 6.3 --
   Miscellaneous (Including Gasoline Stations) 1.7 -3.5 5.7 -2.5 14.1 -10.8 3.4 --
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