NRF Shrugs Off November Dip in Retail Sales
While retail sales were down in November compared to October, they are up year over year. (iStock/encrier)
While other reports touted the slowing of retail sales in November — “Bad news for holiday shopping: Retail sales dropped in November,” a CNN.com headline screamed — the National Retail Federation (NRF) preferred to take a glass-is-half-full-of-eggnog approach to the matter.
November retail sales dipped from the month before but still showed the sixth consecutive monthly year-over-year gain by government calculations and set the stage for a healthy holiday shopping season compared with last year despite the pandemic, the NRF said in a press release Dec. 16.
The U.S. Department of Commerce reported that overall retail sales in November were down 1.1% from October but up 4.1% year over year. Sales were expected to be down 0.3% in November from October, according to some economic analysts.
NRF Chief Economist Jack Kleinhenz said the month-over-month decline wasn’t surprising because some spending was pulled forward into October by campaigns encouraging consumers to shop early and shop safe.
“Despite that, as we go into the final weeks of 2020, year-over-year trends show spending is holding up well regardless of month-to-month fluctuations,” Kleinhenz added. “Nonetheless, we have to remember the remainder of the holiday season depends critically on the virus. We are optimistic, but spending could shift into a lower gear if the virus continues to spread.”
NRF President and CEO Matthew Shay said consumers held back on spending in November as virus rates spiked, states imposed retail restrictions and congressional stimulus discussions were gridlocked.
“While consumers have been bolstered by increases in disposable income and savings, it’s clear that additional fiscal stimulus from Congress is needed and we are hopeful it will be passed soon as we enter the final stretch of the holiday season,” Shay added. “With retail sales up 8.8% versus November 2019, we still expect a strong holiday season compared with last year.”
NRF’s calculation of retail sales — which excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed November was down 0.3% from October but up 8.8% year over year.
NRF said monthly numbers fluctuate even when adjusted for seasonal variations, making year-over-year comparisons a better indication of long-term trends. On a year-over-year basis, retail sales have increased each month since May under NRF’s calculation and since June under the U.S. Department of Commerce’s calculation. Retail sales during the first 11 months of the year were up 6.6%, according to NRF’s calculation.
NRF has forecast that holiday sales will increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion. While NRF defines the holiday season as Nov. 1 through Dec. 31, its research shows 42% of consumers started holiday shopping sooner than usual this year. On average, consumers had about half their holiday shopping left to do as of Thanksgiving weekend, NRF stated.
Specifics from key retail sectors during November include:
• Grocery and beverage stores were up 1.6% month over month and up 8.5 % year over year.
• Building materials and garden supply stores were up 1.1% month over month and up 17.2% year over year.
• Online and other non-store sales were up 0.2% month over month and up 30% year over year.
• Sporting goods stores were down 0.6% month over month but up 14% year over year.
• Health and personal care stores were down 0.7% month over month but up 2.6% year over year.
• General merchandise stores were down 1% month over month but up 1% year over year.