BofA: Still no slowdown (ahead of retail sales)
BofA SECURITIES | GLOBAL RESEARCH
Consumer Spend Collective | Still no slowdown
Our economists expect a moderate retail sales report for September
Total card spending per household (HH), as measured by BAC aggregated credit and debit cards, was up 0.7% year-over-year (y/y) in September. Card spending per HH rose 0.2% month-over-month (m/m) in September on a seasonally adjusted (SA) basis. Our economists forecast a 0.3% increase in the Census Bureau's retail sales ex-autos estimate for September. On a m/m SA basis, BAC card spending per HH remained very weak in furniture, home improvement and clothing. Meanwhile, spending growth at general merchandise stores and restaurants improved relative to August, while gas spending was strong again. Therefore, our economists forecast a 0.2% increase in the core control group (retail sales ex autos, gas, building materials and restaurants).
Aggregate restaurant spending growth accelerates
According to BAC aggregated credit and debit card data, on a one-year basis, aggregate restaurant spending growth accelerated from 2.3% in August to 3.2% in September. Quickservice restaurants (QSR) ex-pizza y/y spending growth decelerated to 4.8% in September, fast casual growth was stable at 5.3% and those two categories are growing faster than pizza, which is still seeing negative growth, and casual dining, which was barely positive in September.
Pool retail spending declines (5.0%) YoY in September
For the month of September, spending at pool supplies merchants (84% correlated with Pool Corp base sales) was (5.0%) lower YoY, declining for the 12th consecutive month, per BAC aggregated credit and debit card data (BAC card data). On a (m/m) basis, spending was down (6.3%) in September, in-line with normal seasonality. Compared to 2019, retail spending on pool supplies increased 32.5% in September 2023. In 3Q23, BAC card spending on pool supplies fell (5.1%) YoY (compared to down 7.4% YoY in 2Q23) and decreased (14.9%) in 3Q from 20. We estimate inflation for the pool industry at 30-35% since 2019.
16 October 2023 Equity Global