By David Moin
with contributions from Maghan McDowell, Vicki M. Young
 on December 28, 2016

As the numbers continue to be crunched, it looks like holiday 2016 at retail could turn out far better than expected.

That’s according to Customer Growth Partners, a retail research firm which has an 18-member field team conducting research in more than 90 major shopping venues nationwide.

“Consumers are driving the best year-over-year growth in holiday retail sales in over a decade, reaching a record $637 billion for the November-December holiday season,” said Craig Johnson, president of Customer Growth Partners.

Based on monthly sales through Dec. 26, which was a federal holiday and a very busy day at stores across America, and the 5.1 percent year-over-year increase reported by the Department of Commerce for November, CGP estimates that total holiday sales will rise 4.9 percent. That’s the best growth since 2005’s 6.1 percent increase and a sharp jump over consensus views of 3.5 percent growth, said Johnson.

“After a slow start the first 10 days of November, holiday 2016 has turned into the best season in many years, exceeding our already above-consensus 4.1 percent growth forecast,” said Johnson. A ‘perfect storm’ of positive factors have combined to drive stellar growth, including rising real incomes, low gasoline prices, food deflation — and now record stock prices.”

Customer Growth Partners said the retail business has been paced by online sales, up 14.9 percent; health/beauty stores, up 7.7 percent; and home improvement, up 7.5 percent.

CGP pointed out, however, that general merchandise sales are down about 1 percent due to weak traffic at department stores and widespread food deflation, trimming top-line sales at mass merchants such as Wal-mart and Costco. Apparel stores are up barely 1.9 percent in November as strong unit volume growth of almost 5 percent in clothing was offset by apparel price deflation of some 3 percent.

CGP’s list of hot items include over-the-knee boots, wraps, long/oversize sweaters, Hatchimals toy pets, Lego products, drones, virtual reality gear, soundbars and headphones, TVs, fashion and statement jewelry, and small leather goods.

In its annual list of bestsellers on, the e-commerce behemoth reported that Levi’s men’s 501 Original Fit Jean, Fossil’s Emma large zip wallet and Kate Spade New York’s Cedar Street cami convertible cross-body bag were among the most popular.

Both of the bags are small, wallet-style totes. The Fossil bag, in eight colors and ranging from $60 to $85, was on Oprah’s “favorite things” list, which for the second year in a row was featured in a separate web destination on The bag is made with a lining that is designed to protect the radio frequency identification chips in credit and debit cards from being scanned by scammers.

The Kate Spade bag is similar, albeit less tech-focused, and appears on for $107 to $148 in at least seven colors.

Men’s jeans, and Levi’s, are consistently popular items on Amazon, as customers typically turn to the site for replenishment and basics items. The Levi’s 501 jeans on Amazon come in as many as 38 colors and cost $25 to $74.

Also popular this year were “ugly” Christmas sweaters, running shoes, watches, diamonds and luggage. Among wearable tech items, the most popular were the Garmin Vivofit fitness band, the Garmin Vivoactive HR GPS smartwatch and Samsung Gear VR virtual reality headset.

And in what has become a key trend across retailers this holiday, more than 72 percent of Amazon customers worldwide shopped using a mobile device, with shopping on the Amazon app up 56 percent this year.

“American consumers are once again proving many of the pundits wrong, as shoppers flock both to web sites and stores and not just for returns. Consumers are buying. They are still shopping close-to-need and focus relentlessly on value — but they are shopping at a rate not seen since the mid-2000s,” Johnson said.

While retail transactions are rising, margins may be shrinking due to all the discounting and extended promotions whether for Black Friday, Super Saturday or some other occasion.

Still, Johnson’s bullishness is supported by The Conference Board, which on Tuesday reported that consumer confidence, after increasing in November, rose again in December.

The Conference Board’s Consumer Confidence Index is now at 113.7, up from 109.4 last month. Consumers were more optimistic about the future than the present. The Expectations Index, one component of the Consumer Confidence Index, jumped to 105.5 from 94.4. The Present Situation Index, the other part of the Consumer Confidence Index, fell to 126.1 in December from 132 in November.

Lynn Franco, director of economic indicators at The Conference Board, said, “Consumer confidence improved further in December, due solely to increasing expectations, which hit a 13-year high.” The last time the Expectations Index was at a similar level was in December 2003 when it was at 107.4.

“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices, which reached a 13-year high, was most pronounced among older consumers,” Franco said. She said sustained consumer confidence next year “will depend on whether or not their expectations are realized.”

Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, said, “Americans became significantly more upbeat about the future of the economy after the November presidential election.” He noted that a stronger dollar helped make many “imported consumer retail goods cheaper; good news for consumers, not the best thing for exporters.”

As for current conditions, those who said business conditions were “good” fell to 29.2 percent in December from 29.7 percent last November. But for the six-month outlook, those who said business conditions would improve rose to 23.6 percent from 16.4 percent. Their outlook for the labor front also improved, with those expecting more jobs increasing to 21 percent from 16.1 percent.

Further, the percentage of consumers who expect their incomes to increase over the next few months rose to 21 percent from 17.4 percent.

The monthly Consumer Confidence survey is conducted for The Conference Board by global information and analytics firm Nielsen. The cutoff date for preliminary results was Dec. 15.

According to data compiled by Nielsen for the December consumer confidence survey, the average inflation rate is 4.5 percent. Of those consumers who were surveyed, the majority had household income over $50,000, including many over $125,000.