FINANCE

Holiday sales a big disappointment; fall short of NRF forecast

BY Marianne Wilson

Consumers did not turn out in force in December — online or off — and overall holiday sales did not meet industry forecasts.

Holiday retail sales in 2018 rose only 2.9% over last year to $707.5 billion, reported the National Retail Federation, falling short of the group’s forecast that sales from Nov. 1 through Dec. 31 would rise 4.3% to 4.8% to between $717.45 billion and $720.89 billion. (The NRF numbers, which exclude automobile dealers, gasoline stations and restaurants, are based on the just-released Commerce Department report, which was delayed by a 35-day partial shutdown of the federal government.)

Online sales also failed to meet expectations. Non-store sales grew 11.5% in 2018 to $146.8 billion. NRF had forecast that the online channel would grow between 11% and 15% to between $151.6 billion and $157 billion.

“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” NRF chief economist Jack Kleinhenz said. “The combination of financial market volatility, the government shutdown and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data.”

NRF president and CEO Matthew Shay sounded a similar note.

“There’s also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable,” he said.

On a month to month basis, overall U.S. retail sales posted their biggest monthly drop — 1.2% — in more than nine years in December amid spending declines across the board and across channels, according to the Commerce Department report. Excluding automobiles, gasoline, building materials and food services, retail sales dropped 1.7% in December after a slightly upwardly revised 1.0% gain in November.

Sales at non-store retailers, which include online and catalog, fell 3.9% in December, the biggest monthly drop since November 2008.

Sales fell in every retail category in December except auto dealers and home centers, where sales inched up 0.3% over November. The data was more encouraging on a year-over-year basis. Year-over-year results from key retail sectors during the November-December holiday season include:

• Online and other non-store sales were up 11.5% at $146.8 billion.

• Clothing and clothing accessory stores were up 4.2% at $61.7 billion.

• Health and personal care stores were up 2.6% at $60.8 billion.

• General merchandise stores were up 2.3% at $146.8 billion.

• Grocery and beverage stores were up 1.9% at $130.5 billion.

• Building materials and garden supply stores were up 1.6% at $61.5 billion.

• Electronics and appliance stores were up 0.2% at $22.3 billion.

• Furniture and home furnishings stores were unchanged at $22.6 billion.

• Sporting goods stores were down 13.5% at $16 billion.

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