Macy's and other retailers have been stepping up security measures since Sept. 11, 2001.

WASHINGTON – Retail sales grew moderately in December at the peak of the holiday shopping season but department and discount store sales fell while specialty stores remained flat, the Commerce Department’s monthly report showed Friday.

Sales at apparel and accessories stores were flat at $21.4 billion on a seasonally adjusted basis, while sales at department stores fell 0.6 percent to $12.5 billion. Sales at general merchandise stores, a category that includes department stores and discounters, fell 0.5 percent to $55.1 billion.

Non-store sales, which have been outpacing brick and mortar stores, rose a seasonally adjusted 1.3 percent to $48.9 billion.

In the overall economy, sales rose 0.6 percent to $469.1 billion, slightly below some economists’ expectations.

Scott Hoyt, senior director of consumer economics at Moody’s Analytics, pointed to two major factors behind the weakness in sales at apparel and accessories stores, department stores and discounters.

“One is a lack of pricing power and the fact that prices appear be weakening in those areas and the second is a shift in consumer purchasing from brick and mortar stores to online,” Hoyt said.

“You can see that in the strong gain in non- store retail sales,” he added. For the month, non-store sales were up 1.3 percent and year over year, those sales were up 13.2 percent.

The year-over-year comparisons between brick and mortar and non-store sales was even more stark, particularly in the general merchandise and department store categories.

Sales at department stores fell 8.4 percent in December compared with December 2015, while sale sat general merchandise were down 2.8 percent. Apparel and accessory store sales were up 0.9 percent, compared with a year earlier.

“Clearly store closings are a big drag on topline sales,” Hoyt said. “The outlook for both department store and specialty stores is definitely clouded by the continued announcements of stores closures.”

Macy’s has plans to close 100 stores and lay off 10,000 workers and Sears is slated to close 150 stores this year.

The National Retail Federation, which uses its own calculations based on government data and analyzed the combined November and December total retail sales, found that they were up 4 percent to $658.3 billion on a year-over-year basis.

NRF’s  had forecast a 3.6 percent increase in sales to $655.8 billion.

The two-month total for non-store sales was up 12.6 percent to $122.9 billion, compared with the November and December period in 2015, NRF said.

NRF had forecast that online sales would grow between 7 to 10 percent to as high as $117 billion. The numbers exclude automobiles, gasoline stations and restaurants.

“The economy was clearly stronger in the fall and consumers were more active during the holiday season than they had been earlier in the year,” said Jack Kleinhenz. “Economic indicators were up, retailers offered great deals, confidence improved and all of that empowered consumers to spend more.”

Kleinhenz noted that average hourly earnings rose in 2016 over 2015, while job gains “remained strong and unemployment, although up slightly in December from November, remained low.”

He also noted that home values have increased and a rising stock market has increased the value of investments.

“These numbers show that the nation’s slow-but-steady economic recovery is picking up speed and that consumers feel good about the future,” said Matthew Shay, president and chief executive officer at NRF. “Retail mirrors the economy. And while there might have been some bumps in the road for individual companies, the retail industry overall had a solid holiday season and retailers will work to sustain this in the year ahead.”

Shay stressed that online sales and brick and mortar sales are essentially “the same thing” for merchants.

“In the new distributed commerce world that allows consumers to buy any product, anytime, anywhere, it really doesn’t matter whether a customer shops in a company’s store or on its website or mobile app,” Shay said. “It’s all retail. Today’s retailers sell to shoppers any way they want to buy.”

Chris G. Christopher, Jr., director of consumer economics at IHS Global Insight, said holiday retails sales rose in December on a “sudden surge in consumer confidence.”

“Consumers turned out in force this holiday season, and with solid December and November sales that were stronger than first estimated, 2016 holiday retail sales grew 4 percent over the year before,” Christopher said. “Consumer mood was bright after the presidential election and ensuing stock market rallies. Consumer confidence soared in December to the highest level since August 2001.”

But there were a few weak spots, particularly in the department store category, he noted.

“Department stores continue to get hammered as online stores outpace the traditional brick-and-mortar retailers,” Christopher said. “Department stores have been underwater since April while onliners keep recording win after win.”

Christopher said e-commerce retail sales accounted for 8.4 percent of retail trade, excluding food services, in the third quarter, which was above the 8.1 percent in the second quarter.

“We expect this share to grow to 16.4 percent by the end of 2017,” he said.

The outlook for real consumer spending “will remain relatively robust into the next year, supported by rising employment, real disposable income, and household net worth,” Christopher added. “Household finances are in good shape, thanks to gains in both home prices and stock prices, along with debt deleveraging.”

 

 

 

load comments
blog comments powered by Disqus