E-Commerce Retail Sales Grew 2.4% in Q1 2022

Figures released by the US Department of Commerce on Thursday revealed that US retail e-commerce sales In Q1 2022, which totaled about $250B, grew by only 2.4% over the 4Q total.

DOC said its numbers were adjusted for seasonal variations but not price increases. Factoring inflation into the 2.4% growth of sales essentially flattens the e-commerce growth curve, which has been faltering since the third quarter of 2021, when e-commerce retail sales actually declined by -0.7% compared to the previous quarter.

Overall US retail sales were estimated at $1.75T in Q1 2022, an increase of 3.7 percent over the results for Q4 2021.  Total retail sales increased 10.5% on a YOY basis in the first quarter.

DOC’s figures, compiled by the US Census Bureau, show e-commerce accounting for 14.3% of retail sales in Q1 2022, which means the online sector is hanging onto most of the huge market-share gains it made during the pandemic, despite many consumers returning to bricks-and-mortar retail as the Omicron surge waned.

As annual e-commerce sales—now approaching $1T—have doubled in the past three years, e-commerce’s share of retail surged from its pre-pandemic level of about 10% to a mid-2020 peak of nearly 17% before leveling off during the past year at between 14% and 15%.

The Q1 2022 retail market share for e-commerce of 14.3% reported by DOC represents a slight downtick from the Q4 2021 market share of 14.5%. Adjusted e-commerce sales totaled $244B in Q4.

E-commerce retail sales grew by 5.9% in Q1 2021, when an adjusted sales total of $234B was reported, and 2.9% in Q2 2021 with $241B in adjusted sales. E-commerce retail sales declined in Q3 2021 to $240B.

While YOY comparisons of e-commerce retail sales paint a picture of a healthy, maturing online sector—DOC reported YOY growth of e-commerce retail sales of 6.6% in Q1 2022—in 1Q 2021 the YOY growth rate was an exponential 47%.

The drop-off from the stratospheric growth curve e-commerce experienced during the pandemic already has had profound implications for the US economy, as took some giant retailers by surprise—including the largest, Amazon, which revealed in its Q1 earnings call that it has overextended its distribution network.

Amazon reported a loss of nearly $4B in Q1, its first quarterly loss since 2015.