Initial Holiday Results: Stronger in Places

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The 4% gain in holiday sales for November-December was stronger than expected and stronger than a year ago—by about half a percentage point on both counts.

The better results occurred partly at brick and mortar stores—not just online. The in-store results, however, were still relatively weak and with gains focused in some unexpected places, according to the initial government report on retail sales through December.

Online retail sales for the holiday months were strong at about 15% growth, but remain estimated based on the government data pending a retail e-commerce sales report due on Feb. 17.

Here’s what we know so far—as also illustrated by the accompanying charts:

  • Brick and mortar or sales in stores were a modest 2.4% higher in November and December compared with a year ago. That was slightly better than the forecast of a 2% gain, but it remained dwarfed by the 15% gain—give-or-take—in online retail sales.
  • The apparel and food-drug-mass channels did modestly better than expected during the holidays, but growth remained relatively weak. The FDM channels were up 2.2% and apparel channels up 1.0% compared with a year ago. Both segments were held back mostly by the big boxes—conventional department stores such as Macy’s and mass retailers such as Target and Walmart.
  • Homegoods channels lagged expectations and year-ago performance. Sporting goods, hobby and other homegoods specialty stores slowed the most. Furniture and home furnishings stores held up best.
  • The unexpected strength in the holiday results was focused in a small group of retail store types—particularly flower, pet, tobacco, and thrift shops—that are counted among miscellaneous other store and nonstore retailers. Mail order catalog also contributed to the gains by this segment.
  • November was the focus of strength for the two-month holiday period as well as the quarter. After November’s 5% jump, sales gains in December slowed to less than the weak-to-modest 3.4% pace of the fourth quarter and second half of the year.

Outside of the November blip, the latest retail data do not yet show a sustained payoff from the post-election jump in spending confidence driven primarily by Boomers (see post here). That may be explained partly by the lagging confidence of Millennials.

Note that the retail sales measures referenced are for sales excluding autos, food service, and fuel. For background on the MacroSavvy™ holiday forecast, see the original post here.

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