Holiday retail sales during 2018 grew a lower-than-expected 2.9% over the same period in 2017 to $707.5 billion according to the National Retail Federation. The announcement followed the U.S. Commerce Dept.’s release of data that had been delayed by nearly a month because of the recent government shutdown.
“All signs during the holidays seemed to show that consumers remained confident about the economy,” says NRF President and CEO Matthew Shay. “However, it appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected. There’s also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable. It’s very disappointing that clearly avoidable actions by the government influenced consumer confidence and unnecessarily depressed December retail sales.”
The numbers, which exclude automobile dealers, gasoline stations, and restaurants, fell short of NRF’s forecast last fall that holiday sales from November 1 through December 31 would grow between 4.3% and 4.8% to between $717.45 billion and $720.89 billion.
The total includes $146.8 billion in online and other non-store sales, which grew 11.5% over 2017. NRF had forecast that the online sector of retail would grow between 11% and 15% to between $151.6 billion and $157 billion.
November—the first half of the holiday season—grew 5.1% unadjusted year-over-year. But December was up only 0.9% year-over-year and down 1.5% seasonally adjusted from November. NRF does not count October as part of the holiday season, but much holiday shopping has shifted earlier, and October was up 5.7% year-over-year. As of December, the three-month moving average was up 0.7% over the same period a year ago.
“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” says NRF Chief Economist Jack Kleinhenz. “The combination of financial market volatility, the government shutdown, and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data. This is an incomplete story and we will be in a better position to judge the reliability of the results when the government revises its 2018 data in the coming months.”
NRF’s numbers are based on data from the U.S. Census Bureau, which said that overall December sales—including auto dealers, gas stations and restaurants – were down 1.2% seasonally adjusted from November but up 2.3% unadjusted year-over-year.
The holiday numbers come as NRF is forecasting that retail sales during 2019 will increase between 3.8% and 4.4% to more than $3.8 trillion.
Year-over-year results from key retail sectors during the November-December holiday season include:
- Online and other non-store sales were up 11.5% at $146.8 billion.
- Clothing and clothing accessory stores were up 4.2% at $61.7 billion.
- Health and personal care stores were up 2.6% at $60.8 billion.
- General merchandise stores were up 2.3% at $146.8 billion.
- Grocery and beverage stores were up 1.9% at $130.5 billion.
- Building materials and garden supply stores were up 1.6% at $61.5 billion.
- Electronics and appliance stores were up 0.2% at $22.3 billion.
- Furniture and home furnishings stores were unchanged at $22.6 billion.
- Sporting goods stores were down 13.5% at $16 billion.