Is retail dead? Not according to the National Retail Federation (NRF), the voice of retail in general and brick-and-mortar stores in particular. Reportedly, the NRF is the world’s largest retail trade association, representing discount and department stores; home goods and specialty stores; Main Street merchants; grocers; wholesalers; chain restaurants and internet retailers from the United States and more than 45 countries. Retail is the US’s largest private-sector employer, supporting one in four US jobs, about 42 million working Americans, contributing $2.6 trillion to the annual GDP.
According to the NRF, holiday sales during November and December 2017 increased 5.5% over the same period in 2016 to $691.9 billion as growing wages, stronger employment and higher confidence led consumers to spend more than had been expected. The number, which excludes restaurants, automobile dealers and gasoline stations, includes $138.4 billion in online and other non-store sales, which were up 11.5% over the year before. This 5.5% increase was larger than the NRF expected, their forecast had been in the 3.6% and 4% range.
There were increases in every key retail category tracked by the NRF except sporting goods during the holiday season, which NRF defines as November 1 through December 31. Specifics from key retail sectors during the Holiday Season include (all unadjusted year on year):
- Building materials and supplies stores increased 8.1%.
- Furniture and home furnishings stores increased 7.5%.
- Electronics and appliance stores increased 6.7%.
- General merchandise stores increased 4.3%.
- Clothing and accessories stores increased 2.7%.
- Health and personal care stores increased 2.2%.
- Sporting goods stores were down 0.5%.
NRF President and CEO Matthew Shay said,
“We knew going in that retailers were going to have a good holiday season but the results are even better than anything we could have hoped for, especially given the misleading headlines of the past year. Whether they shopped in-store, online or on their phones, consumers were in the mood to spend, and retailers were there to offer them good value for their money. With this as a starting point and tax cuts putting more money into consumers’ pockets, we are confident that retailers will have a very good year ahead.”
With US unemployment at a 17-year low, a pickup in income, strong consumer confidence and a rising stock market, NRF Chief Economist Jack Kleinhenz said a number of factors provided a strong base for spending during the holidays. The season came on the heels of the three strongest monthly year-over-year gains for retail sales since the fourth quarter of 2014, nominal disposable personal income was up a combined 3.5% year-over-year in October and November, and consumers were feeling better about using their credit cards, with outstanding balances up 6% year-over-year.