Updated Holiday Results: Revised Down a Bit

Brick and mortar retail gains for the November-December holiday were about 2.4%–given topline sales gains that were revised down a bit to 3.9% and online gains that came in at an estimated 14.9%.

The results were slightly higher than expected. The in-store results, however, were still relatively weak and showed gains focused in some unexpected places, according to the latest data now available.

Holiday 2016 Forecast vs ActualThis is based on non-seasonally adjusted retail sales reported by the government, which has released revised monthly data for the holiday months and new quarterly retail e-commerce results.

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

  • Holiday Channels 2016 Forecast vs ActualBrick and mortar 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 estimated 14.9% gain 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 2.3% and apparel channels up 1.2% 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 (+1.7%) lagged expectations and year-ago performance. Electronics, sporting goods, hobby and other homegoods specialty stores slowed the most. Home improvement, 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. Traditional 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 3.3% 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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