Economy
14 April 2022
Wholesale, import prices rise in March; Retail sales up .5%
Inflation's influence is showing up across consumer goods' journey.

Freight containers (Photo by Eilis Garvey on Unsplash)
Inflation's influence is showing up across consumer goods' journey.
Freight containers (Photo by Eilis Garvey on Unsplash)
Rising prices are shaping the American economy in early 2022.
Following the 40-year high in consumer prices reported on Tuesday, that continued to be the theme as the federal government released new monthly data in key areas over the latter part of the week.
The new data showed that total retail sales ticked up in March, while prices for imports and wholesalers also continued to rise.
Here’s a closer look:
Monthly retail sales were up .5% month-over-month in March, according to the US Census Bureau. The total sales were up 6.9% year-over-year.
The Bureau also posted a revision to its data for February, now stating the month saw an increase of .8% in retail sales over January, as opposed to the previous number of .3%. The revised number means February had growth of 18.2% over the same month in 2021.
As with the Consumer Price Index released earlier this week, rising gas and food prices drove the increase in this area. Gas station sales had a particularly notable spike, up 37% year-over-year. This came as the cost of fuel continues to rise amid record inflation and the Russian invasion of Ukraine. Data released by the government is not adjusted for inflation.
Putting the focus on consumer goods, the National Retail Federation completed a calculation of retail sales totals that excludes gasoline and food services. Its measure showed that these "core" retail sales were unchanged from February, and up 4% year-over-year.
Per the Census Bureau, the biggest month-over-month increases were in general merchandise stores (5.4%), electronics and appliances (3.3%), sporting goods and hobby (3.3%) and clothing stores (2.6%).
Nonstore retailers, which includes purchases made online, were down 6.4% from the prior month in March, according to the Census Bureau, but the total was up 1.1% year-over-year.
“March retail sales show that consumers have maintained their ability to spend in the face of record-level inflation, supply chain issues and geopolitical unrest,” National Retail Federation CEO Matthew Shay said in a statement. “Consumers are adapting and shopping smarter for themselves and their families.
US import price index data (Courtesy of US Bureau of Labor Statistics)
Prices for imports were up 2.6% in March, which was the largest monthly increase since April 2011, according to the US Bureau of Labor Statistics.
This followed a 1.6% increase in February and a 2% rise in January.
Consumer goods followed the overall trend pattern. Data showed the import prices in the category had an uptick of 3% year-over-year. This was the largest rise since a 3.4% year-over-year increase reported in December 2011.
Prices for exports were up 4.5% month-over-month in March. Put together with increases in the first two months of the year, the BLS is reporting the largest rises in export prices since January 1989.
Prices for exports of consumer goods, meanwhile, were not in line with the overall trend, as it did not rise as dramatically. There was an increase of .8% in this category, according to the BLS.
Producer Price Index one-month changes (Chart via BLS)
The Producer Price Index, which measures the prices paid by suppliers and wholesalers before goods reach retail, also posted new highs in March.
The month-over-month increase of 1.4% was higher than the previous two months, the BLS reported Wednesday.
On a year-over-year basis, the BLS said there was an increase in the PPI of 11.2%. This is the highest increase since the government started releasing the measure in 2010.
The PPI's metric of prices for goods that leaves aside food, energy and trade services rose 0.9% in March. This was largest month-over-month increase of this measure since a 1% increase in January 2021.
Taken together, the measures show that everyone is paying more right now, whether they’re consuming, supplying or transporting goods. It’s why we’re not only seeing the price of goods on digital shelves go up, but also rare moves like a 5% surcharge from Amazon for fulfillment services.
Businesses must control costs as they bring in goods, while staying in line with consumer expectations as they look to sell them. It’s a fine line. Everyone is walking it.
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.