US retail surged in October as Americans made an early start on their holiday shopping to avoid empty shelves caused by the pandemic-induced global supply chain crisis.
The solid report from the US Commerce Department on Tuesday suggested high inflation was not yet dampening spending and, added to strong employment growth in October and an acceleration in services sector activity, painted an upbeat picture of the economy after it grew at its slowest pace in more than a year in the third quarter.
Home improvement retail company Home Depot reported its third-quarter sales were up $3.3 billion — or 9.8 per cent — from this time last year as customers continue to spend on home improvement projects.
Professional contractors such as builders and handymen have been rushing back to Home Depot's stores as they look to upgrade their tool kits and source building materials to complete a backlog of home improvement and repair jobs that were put on hold during the Covid-19 crisis.
The US supply chain backlog, explained
The company, which employs about 500,000 workers, beat quarterly sales estimates by about $2bn.
“As evidenced by our strong performance in the quarter, our team continues to do an outstanding job of operating with flexibility and agility,” chairman and chief executive said Craig Menear said in a company statement.
“Ultimately, this is what has allowed us to respond to the elevated home improvement demand that has persisted. I would like to extend my sincere appreciation to our team, as well as our supplier, supply chain and transport partners as we continue to navigate this dynamic environment together.”
In anticipation of holiday season shortages and supply chain logjams, the home improvement retailer has already received most of its fourth-quarter products, executives told Reuters.
Meanwhile, reports on Tuesday suggest Walmart is feeling the effects of rising inflation and supply chain complications.
Walmart chief executive Doug McMillon acknowledged the company will have to work to ease the rising prices, saying “fighting inflation is in our DNA".
Despite this, Walmart surpassed Wall Street's earnings expectations, with sales at US stores increasing by 9.2 per cent in the third quarter compared to the same time last year.
“Looking ahead, we have the people, the products and the prices to deliver a great holiday season for our customers and members,” Mr McMillon said.
Mr McMillon’s tone underscored Walmart’s confidence as it navigates scarce transport capacity, a labour squeeze and rising fuel costs that are combining to spur the fastest growth in US consumer prices in three decades.
This points to upbeat prospects for the crucial holiday shopping season despite the potential drag on profits from rising inflation.
The company's latest report also signals customers bought more items and paid more for goods, with transactions growing by 5.7 per cent and the average amount of sales per customer growing 3.3 per cent.
Agencies contributed to this report
