WASHINGTON —Consumers picked up their spending in November, driving sales increases at specialty stores and general merchandisers, while department stores remained flat, according to the U.S. Commerce Department’s monthly report released Friday.
Sales at apparel and accessories stores rose a seasonally adjusted 0.8 percent to $21 billion, while sales at general merchandise stores, a category that includes discounters and department stores, increased 0.7 percent to $57.2 billion last month. Department store sales were unchanged for the month at $13.7 billion.
Consumers appeared to be spending some of the savings they have acrued from several months of lower gasoline prices and took advantage of earlier discounts institued by retailers in the run-up to Black Friday, according to economists.
“Consumers came out swinging in November in order to take advantage of the price promotions many retailers were offering just after Halloween,” said Chris J. Christopher Jr., director of consumer economics at IHS Global Insight.
Christopher said retail sales excluding autos and gasoline increased 0.5 percent in November after rising 0.3 percent in October.
“Many Americans are starting to use their pump price dividend at the mall or going out to eat,” he said.
But overall retail sales, which grew 0.2 percent to $448.1 billion, fell slightly below economists’ expectations for November, indicating a note of caution on the part of consumers.
Scott Hoyt, senior director of economics at Moody’s Analytics, said, “This was a strong report. It suggests inflation-adjusted consumer spending is continuing to lead economic growth, despite a seemingly disappointing topline [increase] of 0.2 percent.”
Hoyt said while consumer spending has been strong, the savings rate has also been trending up in the last few months, suggesting there is some degree of caution on the part of consumers, which is slowing the pace of spending.
“The stock market [turmoil and declines] and the lack of pricing power are clearly two of the biggest headwinds right now,” Hoyt said. “There is also still disappointing growth in wage rates, although there is evidence that is starting to change.”
One strong growth area continues to be that of online sales, Hoyt noted.
“The evidence suggests there are a lot of apparel sales moving [from stores] to online,” he said. “You are going to continue seeing that shift in apparel from stores to non-store retailers.”
Non-store, or ecommerce sales rose 0.6 percent in November and were up 7.3 percent on a year-over-year basis. Hoyt said the most recent Census Bureau report on the composition of non-store retail sales revealed that the fastest-growing segment of e-commerce sales was apparel in 2014.
Christopher said IHS is predicting “online holiday retail sales growth is likely to outpace last year’s growth, going from 10.9 percent year-on-year in 2014 to 11.7 percent this year. Last year, online holiday retail sales represented 13.7 percent of holiday retail sales, and this year that share is likely to be 14.7 percent,” he said.
Overall retail sales for the holidays are expected to increase 3.4 percent compared with last year, Christopher said, noting it is not as strong as last year’s growth, but still a “solid showing.”
“This holiday retail sales season is looking rather promising since consumer price inflation is modest, confidence is making a comeback, the stock market has stabilized, pump prices are falling and job opportunities are looking brighter,” Christopher said.
Moody’s is forecasting the holiday spending numbers will be in line with the last few years, “OK but not great,” Hoyt said.
“A bigger factor this year than in previous years is a lack of pricing power,” Hoyt said. “Excluding energy prices, prices at retail outlets have been declining on a year-over-year basis and that makes it more difficult for retailers to post strong sales growth.”
The decline in retail prices has helped consumers, according to Jack Kleinhenz, chief economist at the National Retail Federation.
“Consumers right now are getting great value for significantly less this holiday season given the deflationary environment that continues to impact overall trends in spending,” he said. “Additionally, the broadening of the holiday season, warmer-than-normal weather patterns and a shift in spending toward services remain the top challenges for retailers right now.
“All in all, the growth in November really does point to a healthy consumer who at the end of the day will help retailers see solid growth, despite the economic and environmental challenges,” Kleinhenz added.