The crucial December wrap-up to holiday sales generally fell flat for stores across the country, the U.S. Commerce Department‘s monthly report revealed on Friday, with department stores posting a slight uptick in retail sales for the month, and specialty chains and general merchandise stores registering declines.
Department stores sales were up a seasonally adjusted 0.3 percent to $21.17 billion last month, outpacing general merchandisers — a segment that includes department stores — which showed a 1 percent decline to $56.52 billion. Sales at apparel and accessories stores fell 0.9 percent last month to $21.17 billion.
“December retail sales were considerably weaker than expected. It seems that after broad-based gains in November, consumers took a break. There were sizable gains in several retail channels in the last month of the year, such as furniture, building material, sporting, online and restaurants,” said Chris G. Christopher Jr.. director of consumer economics at IHS Global Insight. “The unseasonably warmer December weather did some serious damage to clothing store sales since shoppers were not willing to fork over money for the latest winter fashion, However, an unseasonably warmer December assisted building material and garden supply stores since many households were willing to do those home improvement projects.”
In the overall economy, December retail sales were down 0.1 percent to $448.1 billion from the previous month, but were up 2.2 percent from $438.42 billion in December 2014. Total sales for the October to December period increased 1.8 percent from the same period a year ago, Commerce noted.
Christopher said gasoline station sales took another hit, as pump prices declined. Electronic stores have been in negative territory for every month in the last quarter of 2015, since many shoppers are buying the latest gadgets and smartphones online. He said Americans are using their pump price savings to go out to eat, which in turn cannibalizes grocery store sales. Restaurant sales have been growing strong and were up 0.9 percent in December.
“This report is somewhat disappointing, but caution is needed,” Christopher added. “The retail sales report is not adjusted for consumer price increases. Quarterly consumer good prices excluding food and energy has been in negative territory on a year-over-year basis since the second quarter of 2013, and the third quarter inventory build of 2015 caused many retailers to come out swinging in early November with price discounts and promotions. Looking ahead, consumer spending growth is likely to be relatively robust and the consumer is still doing most of the heavy lifting in the US economy.”