For an economy dominated by consumer spending, the April Retail Sales report scheduled for Tuesday (5/16) promises to be an important one. On the surface, Retail Sales have slowed considerably from their peak readings during the era of stimulus, but even now that the impacts of government checks have moved out of the year look-back, sales have managed to remain relatively strong – at least on a nominal basis. Retail Sales for March were up nearly 7% y/y, although anyone paying attention knows that after factoring in the effects of 8%+ inflation, real Retail Sales would actually be negative.

While Retail Sales have continued to grow at a healthy clip, there’s been an interesting shift between the drivers of the strength. The chart below breaks down the y/y change in sales for online vs non-online sales. For the latest numbers through March, non-online sales were up 7.72% y/y while online sales were only up 1.8%. Looking at this chart over time, one near-constant right up through the early months of the pandemic was that online sales growth was faster than growth in non-online sales. For the last year, though, the roles have been reversed. In fact, in the last 12 months, there has only been one month where the y/y change in online sales was greater than the y/y change in non-online sales.

The chart below shows the monthly spread in the y/y change of online versus non-online sales going back to 1994. In looking at the chart, ever since 2000, months where the y/y change in non-store was higher than the y/y change in online were few and far between. While there have been 11 months in the last 12 where non-online sales grew at a faster y/y pace than online, in the 20 years before the pandemic, there were only 18 months where non-online sales grew at a faster rate than online.