E-commerce now accounts for 15.2% of retail sales while growth slows

If there was one catchphrase that was mentioned in the results comments and presentations in recent weeks, it was this:

Normalization.

Credit card companies And Banks and even some retailers have given the indication that the peaks of the pandemic and the after the pandemic The era of mass prostitution – mainly in the form of sales spurts and spending sprees, especially online, and supported by savings and “dry tinder” on the cards – is behind us.

And more broadly, we are moving toward normalization, in some cases even a decline below pre-pandemic levels. Inflation and consumer restraint are creating headwinds.

Growth is still growth, both in the entire retail sector Sales and in e-commerce sales. But The latest data from the US Census Bureau show thatAccording to the Quarterly Retail eCommerce Sales Report, sales growth continued to slow significantly, from double-digit Interest rates that were still recorded at the end of 2023.

E-commerce sales in the second quarter of 2024 represented 15.2% of total sales on an unadjusted basis, down from the 15.6% contribution in the first quarter of this year and up from 14.6% in a year ago Period.

Looking at the overall picture, Year after year The quarterly growth rate of total revenue has fallen to 1.9%, or about $1.9 trillion, as shown in the chart below. This growth rate is less than half of the long-term Average measured between the Great Recession and the pandemic.

In fact growth is below pre-pandemic levels even when excluding the recession period. And while there is no breakdown by spending category, it suggests that consumers are flirting with a general return to “flat” or “negative spending.”

Certainly the second quarter data is, well, the second quarter, and we got a glimpse of that just last week with the latest monthly retail sales data – This was an increase of 1% in July, recovering from the previous months – that there will be volatility in the future.

And within the overall spending pie, e-commerce sales totaled $282 billion in the second quarter of this year, up 6.6% year over year. But again, there is a significant slowdown in growth, with the increase coming in at less than half the average quarterly growth rate of 14.8%. for the period between the Great Recession and the pandemic. The graph above shows that even in the spending phase before the pandemic – that is, for years – we were well below the trend.

PYMNTS’s earnings season coverage highlighted some of these pressures. McDonald’s sales fell for the first time since 2020 as lower-income consumers stayed home last quarter. Home Depot managed to slight increase in sales in its latest report. There is a split in how consumers spend their money depending on the channel: PYMNTS intelligence data has shown that 44% of respondents paid for their last retail purchase with a debit card, while 28% paid with a credit card. Conversely, 41% of consumers surveyed paid for their last online retail purchase with a credit card. But as we have also seen, debit spending is about using the money That means while lending, according to other government data, grew less than expected in June. until the end of the last quarter. The slowdown seems to be taking hold.