December retail sales post slight gains
December retail sales, spurred by holiday shopping and retailer promotions, were up, according to data released by the National Retail Federation and the United States Department of Commerce earlier today.
Commerce reported that December retail sales at $431.9 billion were up 0.2 percent compared to November and up 4.1 percent compared to December 2012. Total retail sales from October through December are up 1.0 percent annually, and it added that total retail sales for all of 2013 were up 4.2 percent compared to 2012.
NRF reported that December retail sales, which exclude autos, gas stations, and restaurants, were up 0.4 percent on a seasonally-adjusted basis from November and were up 4.6 percent on an unadjusted basis annually. As for total holiday sales, which include November and December, NRF said sales matched up well with its projected forecast of a 3.9 percent annual gain at $602.1 billion, coupled with non-store holiday sales, an indicator of online and e-commerce activity, up 9.3 percent at $95.7 billion.
“Retail sales have been volatile all year and the holiday shopping season was no exception,” NRF Chief Economist Jack Kleinhenz said in a statement. “Solid job growth in the months of October and November led to a more-confident consumer and healthy holiday shopping season for many retailers. While economic and policy uncertainties remain, the economy seems set for steady growth in the New Year. Undoubtedly, some of the increase came at the expense of margin. Retailers are still stressed and a long-term promotional environment may actually hurt the bottom line. As consumer confidence grows, there will be less need for retailers to heavily promote and discount their offerings.”
As previously reported, with retail sales growth still relatively modest, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data.
These things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.
At recent industry conferences, many shippers and carriers were optimistic about fourth quarter retail sales, spurred on in large part by increasing e-commerce activity. Shippers told LM that heading into the holiday shopping season they were allocating inventory and watching inventory levels with a watchful eye and careful planning in advance of holiday shopping before it kicked off.
What’s more, in the North American Port Tracker report released by the NRF and maritime consultancy Hackett Associates, it was noted that the inventory-to-sales ratio is still high at a time when it should be declining seasonally, which could mean that current GDP growth is stemming from the services sector, while albeit not a negative but it could translate into retail sales not being the growth engine for import volumes.
Hackett Associates Founder Ben Hackett said in an interview that this indicates slower retail sales can lead to caution on the part of importers in terms of making sure they have stocks in, and added it is strange that they are still at such high levels. Over the next two-to-three months, he said this will require a watchful eye and should it head down it suggests things are moving strongly from both a logistics and sales perspective.
“December 2013 retail and food service sales inched [slightly] from November, indicating not much last minute spending,” said Charles W. “Chuck” Clowdis, managing director, Transportation Advisory Services for IHS Global Insight. “While there was an increase of 4.1 percent over 2012, the indications are that the consumer still is suffering from a higher than normal uncertainty and continuing caution when it comes to spending. Hopefully concerns like new taxes, real cost of health care, and curious global economic activity fueled by Middle East unrest will stabilize soon and strengthen consumer confidence.”