In November, U.S. retail sales rose .3%, totaling $412.4 billion. Good news for retailers, this was 3.7% higher than last year. Although the Commerce Department's survey does not account for inflation, prices were only 1.8% higher than last year. Therefore, the retail sales report is another indication of the strengthening of the U.S. economy.
What was the impact of Hurricane Sandy? Mixed, according to businesses surveyed. Some saw a drop-off, due to damage or inability of customers or workers to get to the stores. On the other hand, others saw an increase, as people shopped ahead for provisions or evacuees brought necessities in their new locations. All in all, it appears the negative impact was balanced by the positive impact in retail sales only. Of course, in human suffering, the negative impact was horrendous.
Which sectors outperformed the most compared to last year? As you would expect, online sales outperformed every other sector, rising 11.1% above November 2011. The next was sporting goods and hobby stores, up 7.6% above last year. Clothing stores were up 6%, as were restaurants and bars.
Other sectors benefited from record-low interest rates. Auto dealers were up 6.3% and furniture stores did 6.2% better than last year.
Who did poorly? Unfortunately, department stores were down 3.1% over last year. Let's hope that they do better in December. (Source: U.S. Commerce Dept, "U.S. Retail Sales," December 14, 2012)
What It Means to You
Look for big sales and discounts as department stores try to end the year on a positive note. According to the Master Card Spending Pulse Report, December spending has also been mixed. The report suggests that retailers will focus on the 10 days before Christmas, which contribute nearly a quarter of all holiday revenue. This time period is most important to jewelers and other luxury retailers, so look for discounts and promotions there. Last year, shoppers spent almost $147 billion during this critical time period, and retailers will be looking to beat those numbers. (Source: MasterCard Spending Pulse Report)