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Retail Industry Updates

Retail Sales Off to Strong Start for 2021

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January saw month-over-month increases across the board and year-over-year gains in seven out of nine retail categories. (iStock/oatawa)

The government stimulus did what it was supposed to do in January. Consumers shopped until they dropped.

In January, retail sales soared 5.3% from December and 7.4% when compared to January 2020, according to the U.S. Department of Commerce. The National Retail Federation (NRF) said government stimulus checks provided a boost and momentum from 2020’s record holiday season carried over into the new year. Despite month-over-month declines in the last quarter of 2020, sales have grown year over year every month since June.

“January’s retail sales numbers reflect a very strong start for consumers and retailers as we look ahead to a critical year curbing the global pandemic and strengthening our economic recovery,” NRF President and CEO Matthew Shay said. “Consumers and the economy as a whole remain in good shape despite unprecedented adversity over the past year, and congressional action has been a lifeline for households and businesses disproportionately impacted by the pandemic. We’ve convened retail leaders and communicated directly with the White House that it is critically important for the government to work with retailers to get the vaccine into communities and administered as quickly and as safely as possible.”

NRF’s calculation of retail sales — which excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed January was up 5.9% from December and up 10.7% year over year.

“We expected retail spending to ramp up in January thanks to the latest round of stimulus checks and better COVID-19 trends, and it clearly did,” NRF Chief Economist Jack Kleinhenz said. “There was none of the falloff in spending that we often find post-holiday and the increase was even better than expected. There is plenty of purchasing power available for most consumers, and the pickup in shopping has even been reflected in the number of hours worked by retail employees. Confidence is building thanks to the availability of COVID-19 vaccines and states and local governments are beginning to remove restrictions on economic activity. Going forward, I expect consumer spending to build on this momentum.”

NRF said January’s gains built on the momentum during the November-December holiday season, when retail sales as calculated by NRF grew 8% year over year to a record $787.1 billion even after being revised down from a preliminary estimate of $789.4 billion. For the full year, 2020 sales were up 6.7% over 2019.

According to the U.S. Department of Commerce, January saw month-over-month increases across the board and year-over-year gains in seven out of nine retail categories, led by electronics and appliance stores on a monthly basis and online sales on a yearly basis. Specifics from key retail sectors include:

• Online and other non-store sales were up 11% month over month and up 22.1% year over year.

• Sporting goods stores were up 8% month over month and up 22% year over year.

• Building materials and garden supply stores were up 4.6% month over month and up 13.7% year over year.

• Grocery and beverage stores were up 2.4% month over month and up 11.6% year over year.

• Furniture and home furnishings stores were up 12% month over month and up 9.3% year over year.

• General merchandise stores were up 5.5% month over month and up 7.8% year over year.

• Health and personal care stores were up 1.3% month over month and up 3.3% year over year.

• Electronics and appliance stores were up 14.7% month over month but down 4.1% year over year.

• Clothing and clothing accessory stores were up 5% month over month but down 11.3% year over year.

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