WASHINGTON — Discretionary spending ticked up in November, fueling an increase in retail sales across the board at specialty stores, department stores and discounters in November, the U.S. Department of Commerce’s monthly report showed today.
Sales at apparel and accessories stores rose a seasonally adjusted 1.2 percent to $21.4 billion, while sales at department stores rose 1 percent to $13.9 billion. Sales at general merchandise stores, a category that includes discounters and department stores, edged up 0.5 percent to $56 billion.
In the overall economy, retail sales rose 0.7 percent to $449.3 billion.
“Discretionary spending improved significantly in November sending a clear signal that this holiday retail season is looking brighter than last year,” said Chris G. Christopher, Jr., director of consumer economics at IHS Global Insight.
IHS expects consumer spending growth in the fourth quarter to be above 3 percent and holiday sales growth to be “significantly stronger than 2013 and 2012.”
“Looking ahead, we expect real consumer spending growth in 2015 to outpace 2014 due to lower gasoline prices, stronger real disposable income growth, and elevated levels of consumer confidence,” he said. “The real mover and shaker on the retail sales front is online sales. We expect online holiday sales to be more than 14 percent of total holiday retail sales this year.”
Keith Jelinek, senior managing director of FTI Consulting, said the November sales growth was a reflection of “a substantial effort put forward by retailers to pull as many sales into the early part of November as they could.”
“There was a lot of exciting promotion that came out right after Halloween that continued to ramp up right into Black Friday. Even though Black Friday was not the big day we are used to it being, it fell across a six to seven day period, I am pretty excited about the success we saw against last year.”
Jelinek said the specialty store sector has continued to struggle despite more encouraging news in November.
Teen specialty retailers, in particular, have put a drag on the overall sector, he said. “We have seen the unfortunate collapse of several teen retailers in the past few weeks,” he said. “I think that we need to really focus on what is potentially going to be a very difficult first half in 2015 in this area.
Jelinek said discounters have responded well to competition within the sector as well as externally.
“The Targets and Wal-Marts of that world they have really upped their promotional stance and they also have really pushed forward on fashion and their everyday pricing is fairly appealing,” he said “So I think in this particular sector they have seen competition with pricing pressure from the department store side and I think the mass channel has responded to that.”