Holiday sales rise 4 percent despite December dropoff

U.S. holiday sales rose 4 percent from a year earlier, marking the biggest increase since 2011, even amid signs of a consumer-spending slowdown in December, according to the National Retail Federation.

Holiday spending growth had been forecast to rise a slightly higher 4.1 percent in the period, which spans November and December. Still, the increase was well above the previous year’s 3.1-percent gain and the 10-year average of 2.9 percent, the Washington, D.C.-based trade group said.

While the gain was nearly in line with the estimate, U.S. Commerce Department figures released Wednesday showed that spending slowed in December. Excluding automobile sales, retail and food services sales in December were $351.9 billion, down 1 percent from November, the department said.

Retailers spread out the holiday season this year, encouraging shoppers to make more purchases before Thanksgiving. That may have robbed some sales from the weeks leading up to Christmas, even as lower unemployment and cheap fuel put more money in consumers’ pockets.

“While December’s figures are disappointing, holiday sales in 2014 are the best we’ve seen since 2011,” NRF Chief Economist Jack Kleinhenz said in a written statement. “We remain positive about the future and expect to see consumers continue to benefit from the extra income gained from an improved job market and the dramatic fall in gas prices.”

Broader slump

The Commerce Department figures showed December retail sales slumped by the most in almost a year. Including autos, the 0.9-percent drop reflected a broad-based decline among nine of 13 major categories, including electronics and clothing stores.

The NRF figures for holiday sales exclude auto sales, gas stations and restaurants, so they give a different picture of the economy. Still, the NRF also measured a 0.9-percent drop in seasonally adjusted month-to-month sales in December.

Total holiday spending rose to $616.1 billion, according to the NRF. E-commerce sales outpaced broader spending, climbing 6.8 percent, to $101.9 billion.

Over the holiday season, retailers relied less on major events such as Black Friday, the day after Thanksgiving, opting instead for a steady stream of promotions.

A separate research firm, First Data, said retail sales increased 3.2 percent from Nov. 1 to Jan. 4, up from a 0.5-percent gain in the year-earlier period. Sales climbed 5.3 percent from Thanksgiving through Cyber Monday, which follows the Black Friday weekend, the Atlanta-based firm said. That also suggests spending slowed down in December.

ShopperTrak, meanwhile, had a more optimistic view. It said holiday spending jumped 4.6 percent from a year earlier. That was the biggest rise since 2005 and exceeded the Chicago-based company’s forecast for a 3.8-percent gain.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets on
{{ count_down }}