NRF report: Sandy and fiscal cliff send October retail sales downward
Washington, D.C. — The National Retail Federation said Wednesday that, for the first time in three months, retail sales ticked down slightly as consumers cooled discretionary spending in the face of inclement weather and uncertainty in Washington.
October retail sales (excluding automobiles, gas stations and restaurants) decreased 0.3% seasonally adjusted from September yet increased 3.9% unadjusted year-over-year.
“While Hurricane Sandy certainly impacted consumer spending in the northeast and mid-Atlantic states, the larger threat to the overall economy is the impending fiscal cliff, which impacts Americans across the country," NRF president and CEO Matthew Shay said. “The automatic tax increases and spending cuts set to take effect at the end of the year may have more of an impact on business confidence and consumer spending than any other issue. It’s imperative that policymakers address the looming fiscal cliff now to give consumers some certainty heading into the holiday shopping season.”
October retail sales, released Wednesday by the U.S. Department of Commerce, showed total retail and food services sales (which include non-general merchandise categories such as automobiles, gasoline stations, and restaurants) decreased 0.3% seasonally adjusted month-to-month yet increased 3.8% unadjusted year-over-year.
“The underlying strength of the American consumer is encouraging but it’s far from definitive,” NRF chief economist Jack Kleinhenz said. “Hurricane Sandy will have short-term and long-term reverberations on the economy and will continue to impact consumer spending and retail sales over the coming months in the hardest-hit areas. Even though retail sales declined in October, NRF remains confident in moderate consumer spending nationwide, and expects a solid holiday shopping season.”
Other findings from the October retail sales report include:
- Clothing and clothing accessories stores’ sales decreased 0.1% seasonally-adjusted month-to-month yet increased 4.2% unadjusted year-over-year.
- Electronics and appliance stores’ sales decreased 1.0% seasonally-adjusted month-to-month and 4.2% unadjusted year-over-year.
- Furniture and home furnishing stores’ sales decreased 0.6 % seasonally-adjusted month-to-month yet increased 7.3% unadjusted year-over-year.
- General merchandise stores’ sales increased 0.2% seasonally-adjusted month-to-month yet decreased 1.1% unadjusted year-over-year.
- Health and personal care stores’ sales increased 0.3% seasonally-adjusted month-to-month yet increased 2.1% unadjusted year-over-year.
- Non-store retailers’ sales decreased 1.8% seasonally-adjusted month-to-month yet increased 12.6% unadjusted year-over-year.
- Sporting goods, hobby, book and music stores’ sales increased 0.5% seasonally-adjusted month-to-month and 5.4% unadjusted year-over-year.
NRF urges Washington to fix fiscal cliff before Black Friday
Washington, D.C. — The National Retail Federation on Wednesday urged President Obama and Congress to come up with a plan to avoid the “fiscal cliff” by Thanksgiving, saying uncertainty over the pending combination of tax hikes and spending cuts threatens consumer confidence during the holiday shopping season that begins on Black Friday.
“Although most economists have focused on the impact to the economy in 2013, more immediate economic consequences could occur over the next few weeks if consumers lose confidence in the ability of policymakers to work together to solve tough problems,” NRF president and CEO Matthew Shay said. “Any disruption to consumer confidence and spending during this season could prompt a crisis for retailers and the millions of U.S. jobs the industry supports.”
Rather than setting New Year’s Eve as its deadline, Washington needs to act quickly to set in place a framework for resolving this situation, preferably before Thanksgiving, said Shay.
Shay’s comments came in a letter sent Wednesday to the president and all members of the House and Senate. Shay explained in the letter that many retailers make a quarter or more of their annual sales during the November-December holiday season. NRF is forecasting that holiday sales will increase 4.1% to $586.1 billion this year.
Gift card spending to reach record $28.79 billion
Washington, D.C. — The National Retail Federation’s 2012 holiday consumer spending survey conducted by BIGinsight showed that 81.1% of shoppers will purchase at least one gift card and will spend an average of $156.86 on gift cards, the highest amount in the survey’s 10-year history. Total spending on gift cards will reach $28.79 billion.
According to NRF’s first holiday survey, released in October, six in 10 (59.8%) of those polled said they’d like to receive gift cards this year, up from 57.7% last year.
“Retailers are pulling out all the stops this year to make their gift cards personal, convenient and desirable,” said NRF President and CEO Matthew Shay.
Consumers will spend an average of $43.75 on each card they buy. As in previous years, men plan to spend significantly more on gift cards than women, shelling out an average of $172.98 versus women’s $141.66.
When it comes to which gift cards people will buy this holiday season, more people than ever say they will give their friends or family members a gift card for an online merchant (11.2%) and coffee shops (18.1%). Others will buy gift cards to department stores (39.1%), book stores (20.8%), grocery/gasoline stores (12.6%), and discount stores (14.2%). And 33.3% of shoppers will send friends and family for a night out with restaurant gift cards.
More than one in five (21.1%) gift givers say they’ll buy gift cards because they are easier and faster than traditional gifts. But practicality comes out as the most likely reason shoppers will buy gift cards this year as 44.7% say they’ll buy gift cards because they allow the recipient to select their own gift (down from the 46.4% of people who said the same last year).